PD, ministry talks begin on banned vessels carrying LPG from berthing

ISLAMABAD: The Petroleum Division (PD) has started talks with the Ministry of Maritime Affairs (MoMA) on a notification, which banned five vessels from berthing at Port Qasim, KPT, and Gwadar Port carrying LPG to meet the country’s gas demand.

On February 4, 2022, Mercantile Marine Department (MMD) issued a notification to ban five LPG vessels from berthing at Port Qasim, KPT, and Gwadar Port carrying LPG.

The destination of ships was Iran.

The Ministry of Maritime Affairs had called a meeting for 8th February 2022 to discuss the alleged involvement of these five LPG vessels in money laundering.

Sources present in the meeting stated that the Secretary MoMA, Asad Hayauddin personally chaired the meeting and it was decided that no restrictions could be imposed on the basis of allegations and the matter be referred to the relevant body for further investigation.

Meanwhile, the MMD, which reports to the Maritime Ministry refused to withdraw its letter banning these vessels.

The Senate Standing Committee on Petroleum in its meeting held on Thursday also, unanimously, recommended the Petroleum Division not to ban on import of LPG via sea, which could cause serious gas crises as 73 percent population used LPG, coal and other fuel other than pipeline gas.

Secretary Petroleum Ali Raza Bhutta and Chairman Oil and Gas Regulatory Authority (OGRA) Masroor Khan also stated that the matter should not be investigated by a well reputed investigating agency of the country.

The chairman OGRA said no idea where the on-going investigation into oil shortage in June 2020 was heading. He also said such hurdle could also jeopardise the government target to increase LPG contribution in energy mix from 1.2 to five percent.

Managing Director Sui Southern Gas Company (SSGC) also stated that the FIA did not raise any objection on LPG ships and did not stop them from import as 50 percent of the country’s consumption of LPG went through their terminal.

Industry sources say that these vessels have been regularly discharging cargo at Port Qasim for the last eight years and issuance of such notification led to increase in market price of LPG overnight. An increase of Rs6,000 per Metric Ton was observed after circulation of this notification and prices are likely to sky rocket once stock at terminals depletes.

An official of the Petroleum Division, on condition of anonymity, stated that the ministry had recommended against imposition of selective restrictions as they would lead to supply disruption and profiteering by other importers of the LPG importing via sea and land.

As per available documents, the LPG Industries Association of Pakistan has been circulating news of banning these vessels for the past few months and in their circulation these five vessels were name along with the number of trips and quantity of LPG imported.

Several allegations of evasion of custom duty have been levelled against land imports in the past; however, no formal inquiry has been initiated any authority in this regard, sources said.

Copyright Business Recorder, 2022