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ISLAMABAD: The Petroleum Division suggested to a parliamentary panel that Pakistan should sign long-term LNG contracts for the secure supply of imported fuel in winters.

The Senate Standing Committee Meeting on Petroleum was held on Monday at the Parliament House and was presided over by Senator Mohsin Aziz.

Minister for Energy Omar Ayub informed the Senate Standing Committee on Petroleum about the problems being faced in LNG import when the price of fuel surged due to increased demand from Korea and Japan. He further said that the LNG was imported after keeping in mind merit order for power generation.

The committee was briefed on the current situation of the pending issue between the Federal and Sindh governments for laying a 17km gas pipeline of imported gas. The committee was apprised that the Sui Southern Gas Company Limited (SSGCL) laid the subject pipeline in all respects including modification of CTS Bin Qasim and SMS Pakland, Pipeline was commissioned on 22 December, 2020.

The committee further took up the issue of the supply of gas to the Sui residents and directed the ministry to write to the Pakistan Petroleum Limited regarding this and submit a compliance report.

The meeting commenced with follow-up and further discussion on merger/absorption of employees of Lakhra Coal Development Company (LCDC), Ltd. The Committee was informed that the LCDC was established as a joint venture in 1990 among Pakistan Mineral Development Corporation (PMDC), Government of Sindh and Water and Power Development Authority (WAPDA). The renewal of coal mining lease granted to the company was declined by the Government of Sindh in 2019 and thus, the company was deprived of the source of revenue generation. The future of LCDC and its employees was deliberated upon by the Board of Directors of the company. Since there were no visible business development avenues; employees were served notices and a financial plan for payment of their dues was being worked out. No response has been received from the Government of Sindh, despite repeated reminders.

The Committee took cognizance of the dire financial burden faced by the employees of LCDC and deliberated on two proposals to facilitate the employees; namely payment of the outstanding dues to the employees by the PMDC, the WAPDA and the Government of Sindh with respect to their shareholding or the proposal of lease agreement drawn in favour of the PMDC.

The Committee directed the LCDC to share audited figures of outstanding liabilities with the Government of Sindh within three days after which the Committee would reconvene within next 15 days to take a final decision on the matter.

Discussing the progress of exploration of Kohlu block, the Committee was informed that last extension was granted w.e.f 01 January 2020 for a period of two years; in order to enable the company to discharge its minimum work obligations which have been pending since a long time due to the volatile law and order situation in the area.

The OGDCL has reported that as an operator of the block it has been continuously pursuing the concerned authorities for provision of security clearance cover for immediate commencement of exploration activities in the area. The Committee directed that all efforts must be made to ensure that work commences at the earliest and that a monthly progress report must be submitted to the Committee.

While being briefed on actions taken by the Petroleum Division on the recommendations of the Senate Standing Committee on Petroleum held on 21st May, 2019 to curb the smuggling of POL products and the action taken by the Petroleum Division in the light of the directives of the prime minister; the Committee was informed that following the directives issued by the prime minister against fuel smuggling and illegal fuel distribution in the country; National Taskforce has been constituted with the chief minister and the home secretary as conveners. The Committee was further informed that smuggled Iranian diesel fulfills 19.5 percent of the total demand.

The Committee was also informed that a strategy has been developed by the FBR, where in the first stage; illegal retail outlets that are prime beneficiaries of the smuggled fuel in the three provinces of Punjab, Sindh, and Khyber-Pakhtunkhwa would be sealed. As per devised strategy, in the second phase, the situation in Balochistan would be addressed. The Committee was of the view that the government must provide an alternate source of livelihood to those who are affected by this measure in Balochistan.

Discussing implementation status of recommendations of the meeting of the Senate Standing Committee on Petroleum held on 5th and 6th December, 2019 regarding measures taken thereof to improve the safety standards of mines; it was asserted that standards must be defined to formulate a system.

The Committee directed the Mine and Mineral Development Department, Balochistan that in order to protect lives all “C” category mines, which are the riskiest, must be upgraded to category “B” or be shut down.

The Committee reiterated the need for increasing registration of labour. The Committee directed the Mine and Mineral Development Department, Balochistan to notify PKR 500,000 the already agreed upon amount as part of the compensation package to be paid by an employer immediately.

Copyright Business Recorder, 2021

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