Islamabad, November 30, 2020 (PPI-OT): Petroleum Division hosted the consultative meeting on pricing mechanism of gas LNG this afternoon. Minister for Energy Mr. Omar Ayub Khan and Special Assistant to Prime Minister on Petroleum Mr. Nadeem Babar co-chair the meeting with Energy Ministers of all Provinces. Mr. Taimur Khan Jhagra, Finance Minister, Government of Khyber Pakhtunkhwa, Mr. Imtiaz Sheikh, Minister for Energy, Government of Sindh, Dr. Mohammed Akhtar Malik, Energy Minister, Government of Punjab, Mr. Himayatullah Khan, Advisor to CM Khyber Pakhtunkhwa on Energy Power, and Chief Secretary Balochistan Mr. Fazeel Asghar represented the respective provinces.
The Forum explored the issues, challenges and plausibility of implementing a country-wide sustainable affordable gas pricing mechanism. At the onset of meeting, Federal Minister Mr. Omar Ayub Khan thanked the Provincial Ministers for joining the meeting for national cause. He said that Prime Minister of Pakistan Mr. Imran Khan is keen to resolve the issues pertaining to gas sector and maintaining the supply chain of gas throughout the country.
SAPM on Petroleum Mr Nadeem Babar initiated the discussion to explore sustainable affordable mechanism for gas tariff regime. He recapped the salient points of the consultations held by the Federal Government and Federation during Council of Common Interest Gas Seminar organized by this Division in September 2020. He said that the rate of production of local gas has decreased over the years, which contributed in supply demand gap in gas sector. He also highlighted the vision of Prime Minister Imran Khan to resolve the issue within premises of constitutional right of Provinces which is acceptable for all stakeholders.
Mr. Babar also spoke of legal constraints of LNG to be added in gas pool. He said that as per decision of the previous government, LNG has been declared a Petroleum Product (ie petrol) and not natural gas, consequently, LNG is “ring-fenced” from local gas that’s why OGRA cannot include it in the gas pricing and the government cannot provide cross subsidy mechanism to meet all the demand of gas. He also apprised the forum about the cross-subsidy being provided by the Government on energy sector.
Provincial representatives admitted the fact of gas shortage across the country and asked Petroleum Division to prepare data-based formula for pricing mechanism of gas sector. SAPM concluded the consultative session describing the meeting as a step in the right direction. He said follow-up sessions will be continued between Federal Government and Provinces to formulate the gas tariff mechanism nationwide.
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