40 to 50 per cent of every dollar of shale gas revenues at $14/MMBtu will come back to the government exchequer.
MARDAN: According to The Express Tribune of July 17, the government has rejected a proposed shale gas price of $14/MMBtu, based on industry studies of what price level will be required to make the exploitation of shale gas economical for the industry.
Just a few simple comments on a very complex subject. Firstly, 40 to 50 per cent of every dollar of shale gas revenues at $14/MMBtu will come back to the government exchequer and the country in the form of duties, royalties, taxes and other in-country levies and obligations — in addition to generating considerable domestic employment, and hopefully eventually, expertise. Secondly, every dollar spent on gas imports — be it the Iranian gas purchased at a similar price or Qatar’s LNG purchased at a much higher price than $14/MMBtu, will go straight out of the country. No duty, no royalty, no income tax, nothing. And thirdly, if you buy a product from outside Pakistan at a higher cost than you are willing to pay a potential domestic producer of the same product, is not your message to the potential domestic producer: please don’t bother?
Sher Ali Khan
Published in The Express Tribune, July 19th, 2013.
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