Backed by the petroleum ministry, the three government-owned energy companies have sought a cumulative 28 per cent increase in the price of imported regasified liquefied natural gas (RLNG) approved by the Oil and Gas Regulatory Authority (Ogra) early this month, reported Dawn news. The Pakistan State Oil (PSO), the Sui Southern Gas Company (SSGC) and Sui Northern Gas Pipelines Limited (SNGPL) have written to the regulator that the RLNG price approved at $8.64 per unit on Oct 7 did not offer them substantial incentive to be in RLNG supply and it should be increased to about $11.20 per unit. The PSO has also asked Ogra to approve the price for four RLNG ships imported without tendering process based on a letter of the petroleum ministry to allow recovery of Rs11 billion spent on these shipments. The continuous muddling through in the matter of arranging LNG imports is becoming tiresome. If a hike in the price of LNG is being demanded now, after Ogra has already fixed the import price and after a raft of resignations from the state-owned oil and gas companies by executives who refused to be coerced into signing contracts that were of dubious legality, then it only serves to highlight how the petroleum ministry is writing the LNG script on a day-to-day basis. The big obstacle to LNG imports is the great disparity in price between imported and domestic gas. If important commercial consumers of natural gas — fertiliser, power, vehicular — are getting domestic gas at a heavily subsidised rate, where is their incentive to opt for imported gas? This disparity ought to have been the first thing to address when venturing into LNG imports. The petroleum minister was rather triumphant around the same time last year in announcing that CNG station owners would now be allowed to import their own LNG consignments and sell them directly to the consumers, without elaborating how the pricing regime would need to be reformed in order to make that happen. Over the year since then, he has tried to address every issue regarding LNG imports, from the technical merits of the proposal to the importance of LNG for the future of Pakistan’s energy, without once going into the question of the price reforms necessary to make imported LNG possible.
pk.shafaqna.com
