ECC likely to approve LPG Policy 2012 today

Will also consider proposed margin hike on petrol, funding for Neelum Jhelum.

ISLAMABAD: The Economic Coordination Committee (ECC) is scheduled to meet on Tuesday (today) to approve the LPG Policy 2013 binding the public sector exploration and production (E&P) companies to give preference to LPG air mix plants while selling liquefied petroleum gas (LPG).

ECC had already held a meeting on Thursday and twenty summaries were tabled for approval. However, seven summaries were discussed and the remaining 13 will be tabled on Tuesday for approval.

“In case the LPG air mix plants are not able to buy the gas, the LPG will be disposed off in a transparent manner to the licensed marketing companies on terms and conditions to be settled between the buyer and seller,” a senior government official said, adding that the aforesaid provision was open-ended and any entity/company setting up a LPG air mix plant may establish its right to have preference to get LPG from the public sector E&P companies. The gas will be given weighted average cost of gas arrangements to be approved by ECC on a case to case basis.

OMCs and dealers margins

ECC will also consider a proposal on raising the margins of the oil marketing companies to 12.5% and to 17.2% for the dealers on petrol. ECC had also been proposed an increase in margins of the OMCs to 5.7% on high speed diesel.

Sources said the Oil and Gas Regulatory Authority (Ogra) had opposed the proposed margin hikes and asked the ECC to audit OMCs and dealers to examine present profitability levels. Ogra said that the OMCs and dealers were earning hefty profits already, thus any hike was unjustified.

The current OMCs margin on diesel is Rs1.76 per litre and Rs1.98 per litre on petrol. The dealers’ margin on petrol is Rs2.37 per litre and Rs2.20 per litre on diesel.

Funding for Neelum Jhelum

The other agenda on ECC’s timetable for Tuesday is the approval to seek a $500 million loan from the Standard Chartered Bank and issue Rs10 billion ($100 million) Sukuk bonds for financing the Neelum Jhelum hydropower project, according to sources.

Earlier, Export-import Bank of China backed out from financing the dam and left Pakistan in a complex situation where the country had to look towards the local banks for financing the 969MW-project.

Moreover, the ECC will also consider allocation of gas from new resources and disposal of 700 tons of sugar.

Published in The Express Tribune, February 26^th, 2013.

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