Pakistan GasPort Chairman Iqbal Z. Ahmed last week urged the government to allow the private sector to import LNG, noting global prices are on the decline but Pakistan is unable to secure any benefit from the situation.
Attending the first meeting of a high-level committee formed by Prime Minister Shehbaz Sharif to facilitate new investments in the oil and gas exploration and production (E&P) sector, he noted that RNLG costs in Pakistan were 40 percent higher than required and could decline by rationalizing port charges, taxes and margins. According to daily The News, he said the private sector was barred from importing RLNG, despite an excess of supply in the international market that had led to low prices.
The daily noted that Mr. Ahmed had rebutted claims of limited demand of RLNG in Pakistan, stressing that the demand existed but was unfulfilled due to Sui companies’ inability to sell gas. “Since Sui companies are not interested in marketing the imported gas—preferring to rely on the 17 percent profit on assets—they divert the costly gas to the domestic sector, creating loss in recovery that appears in the shape of circular debt,” he told the meeting.
The News reported Mr. Ahmed had argued that if the private sector were allowed to import RLNG, it would not only sell the imported product at a reasonable price, but also ensure 100 percent consumption of RLNG in the country. The PGPC chairman also reiterated his suggestion of deregulating the import of LNG and the gas sector, which The News reported was agreed upon in principle by almost all participants of the meeting.
Deputy Prime Minister Ishaq Dar leads the 20-member committee tasked with facilitating investments in the E&P sector. During the meeting, he urged all stakeholders to work together to help reduce the circular debt. He also asked the maritime ministry to submit a report explaining why the Port Qasim Authority charges the world’s highest tariffs from LNG carriers, as these are subsequently passed onto RLNG end-consumers.