A parliamentary panel, scheduled to meet early next month, will question the Ministry of Petroleum and Natural Resources over imposition of petroleum levy on liquefied petroleum gas (LPG) production without going through proper legislation.
The National Assembly Standing Committee on Petroleum and Natural Resources, which will meet on November 2, will take up issues related to LPG, liquefied natural gas (LNG) and new petroleum policy. The Petroleum Policy 2011 is being finalised to give more incentives to exploration companies to find oil and gas reserves, which will help the government overcome energy crisis.
According to the agenda of the meeting, the petroleum ministry will give a briefing on suspension of different clauses of the LPG Policy 2011 by the Lahore High court relating to imposition of petroleum levy, compulsory import of 20 per cent supplies by domestic LPG producers and preferential treatment to public sector companies in allocating LPG supplies. The ministry will explain effects of the policy and amendments being proposed.
LNG Policy 2011
Ogra has so far issued LNG terminal construction licences to three parties including Pakistan Gas Port, Engro Corporation and Global Energy.
However, according to sources, LNG importers are concerned about what will happen if they import LNG and are not able to transport it to consumers. They have already invested millions of dollars in import projects.
Global Energy claims it has invested $17 million while Pakistan Gas Port has achieved financial close for $100 million financing.
Petroleum Policy 2011
The petroleum ministry will also brief the NA panel on the Petroleum Policy 2011, the draft of which is ready to be tabled before the Economic Coordination Committee (ECC) for approval.
In the new policy, the government has decided to increase maximum wellhead gas price by $1 per million British thermal unit (mmbtu) from existing $5 to $6.
A bonanza of $1 per mmbtu will also be announced for those who will invest in offshore and shale gas exploration and complete drilling of first three wells. Base price is also being enhanced from $30 to $50 per barrel to determine wellhead price.
Published in The Express Tribune, October 23rd, 2011.