The Senate Standing Committee on Petroleum convened on Tuesday at Parliament House. Presided over by Senator Abdul Qadir; members present included Senator Engr. Rukhsana Zuberi, Senator Fida Muhammad, Senator Shamim Afridi, Senator Aon Abbas, Senator Prince Ahmed Omer Ahmedzai, Senator Atta ur Rehman, Senator Saifullah Abro and senior officers from the Petroleum Division, OGDCL and OGRA along with all concerned.
The Committee took strict notice about the absence of the Minister for Petroleum and Secretary Ministry of Petroleum. Matters that were discussed included reasons for increase in petroleum prices; briefing by PLL regarding action taken for long term allocation of LNG terminals to private firms; briefing by SNGPL about the present status of the approval of the Initial Access Agreement with private shipper UGDC by its Board of Directors (BoD).
Discussing the current situation in the Oil and Gas markets globally, the Committee questioned the Ministry the reason for exorbitant petrol rates in Pakistan despite drop in prices globally. The Committee was informed that the reason for rise in petrol and petroleum goods in Pakistan despite lower rates globally was that petrol had been purchased in advance. Another reason for the increase was the application of PDL each month as per IMF agreements. The Committee stressed the need for stringent measures to be taken to facilitate the common man in Pakistan
Being briefed by PLL regarding action taken for long term allocation of LNG terminals, the Committee was informed that the ECC/Cabinet approved the allocation of GOP’s contracted utilized capacity on three months rolling basis to facilitate private sector import of LNG which is linked to terminal capacity. PLL is working on short and long term LNG supply tenders; therefore feasibility of long term tenders is not prudent as it will reduce the government’s ability to adjust LNG import to meet demand in the country. Enhancement of current short term allocation period beyond 3 months may be taken after considering response of LNG suppliers in next PLL tender. Moreover the parties will be required to agree on framework for recovery of any price differential.
Regarding import of LNG by private firms in the country and the present status of the approval of the Initial Access Agreement with private shipper UGDC by its Board of Directors (BoD) the Committee was informed that as per TPA Rules and Network Code, gas supply can only be provided up to industrial supply main on the distribution network. OGRA has issued a clarification that transportation services can be provided beyond industrial supply mains. SNGPL has filed a review petition before the Authority response which is awaited from OGRA. President All Pakistan CNG Association was of the view that when the Oil and Gas market is open to private players it will play an important role in regulating gas prices thereby ensuring the influx of foreign exchange. He asserted that OGRA is in favour of an open policy that will de-monopolize the market. Chairman Committee, Senator Abdul Qadir, weighing pros was of the view that the Private Sector must be allowed to enter the oil and gas market in Pakistan.