LAHORE: The Senate Standing Committee on Petroleum directed Sui Southern Gas Company Limited (SSGC) on Monday to review its decision and restart local LPG production in the national interest.
SSGC stopped gas supplies to Jamshoro Joint Venture Limited (JJVL) on June 21, 2020. As a result some 9,000 metric tons of LPG and 4,000 metric tons of NGL has disappeared from the market, leading to price volatility and an additional burden on the current account deficit from imports, which will cost an estimated $50 million this year.
"SSGC must review and revisit its decision keeping in mind the full utilization of national assets and local resources in the national interest," said Sen. Mohsin Aziz, Chairman of the Senate Standing Committee. "SSGC is a national flag carrier in the oil and gas sector and has a responsibility to consumers."
JJVL, commissioned in 2005, has provided SSGC with income of Rs 84 billion since then and a profit of over Rs 29 billion without any investment on the part of SSGC, JJVL Director Fasih Ahmed told the committee. "JJVL serves the energy requirements of 750,000 households nationwide and has created 5,000 direct and indirect jobs," he said. "Over 15 years, it has paid Rs 19 billion in taxes, had export earnings of $261 million, and yielded $1 billion in foreign exchange savings through import substitution."
Committee member Senator Taj Afridi strongly urged restarting local LPG production at JJVL to improve the investment climate in the country and to ensure energy security. He said that sales tax is 17 percent on local LPG production and 10 percent on LPG imports, and asked the Ministry of Energy to provide a level playing field to all investors.
Asad Hayauddin, Federal Secretary of the Ministry of Energy (Petroleum Division), said that the Federal Cabinet's Economic Coordination Committee will be reviewing the JJVL matter on Wednesday.
Irfan Khokhar, Chairman of the LPG Distributors Association, said the decision to restart local LPG production would serve the national interest and facilitate reduction of consumer prices.-PR
Copyright Business Recorder, 2020
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