Transfer of burden: PEW rejects LPG import plan

Says masses will have to pay the bills for govt’s personal welfare plan.

The Pakistan Economy Watch (Pew) on Friday rejected government’s plan to import 15,000 tons of liquefied petroleum gas (LPG) monthly during winter.

The import of 75,000 ton of LPG from November to March to reduce shortage of natural gas was aimed for personal welfare while masses will have to pay the bill, it said, according to a press release.

The top management of the Sui Southern Gas Company (SSGC) and Sui Northern Gas Pipelines (SNGPL) had been directed to buy 500 tons of LPG each from Saudi Aramco to be added in the gas system after mixing air in it.

Similarly, the SSGC and SNGPL, who will buy 250 tons of LPG each, were directed to make a deal through a broker, highly placed sources in the Ministry of Petroleum and Natural Resources said Pew Senior Vice President Abdullah Tariq.

The present Aramco contract price for LPG was $946 per ton while bringing it to Pakistan will cost another $150 per ton excluding taxes and other expenditures. The move will cost the people Rs50 million per day for five months or Rs7.8 billion in total.

Tariq said that the government and private companies were extracting 1,100 tons of LPG from all the oil and gas wells in Pakistan, which is shrinking the supply of natural gas. On the other hand, the government plans import LPG which will jack up the cost of gas for masses.

Theft of gas has reached to 12 % of total production or around 504 tons. This is the same amount of gas the government wanted to import but it would rather import than stop theft, said Tariq.

It may be mentioned that price of local gas is $6 per British thermal unit (BTU) while cost of imported LPG stands at $24 per BTU.

Presently, country’s total production of gas stands at 4,200 million cubic feet per day (mmcfd) while demand in winter touches 5,900 mmcfd.

Published in The Express Tribune, September 22^nd, 2012.