National Assembly body to discuss liquefied gases, petroleum policies today

The National Assembly (NA) Standing Committee on Petroleum and Natural Resources, which is scheduled to meet today (Wednesday), will discuss the Liquefied Petroleum Gas (LPG) policy, Liquefied Natural Gas (LNG) policy and draft of the petroleum policy 2011, as the policy on LPG has been suspended by Lahore High Court.
The meeting is expected to be briefed by Dr Asim Hussain, Minister for Petroleum and Natural Resources on the above-mentioned policies, besides suspension of the imposition of Petroleum Levy (PL) and other clauses of the LPG Policy 2011, which have been struck down by the Lahore High Court.
Several LPG marketing companies approached the court against the enforcement of Federal Government's LPG policy 2011. The Policy imposed PL of $120/ MT on the locally produced LPG and all the licensed marketing companies are required to import 20 percent of LPG. The Policy also grants preferential treatment to State-owned utility companies in allocation of LPG, which is an attempt to create State's monopoly by restricting competition altogether.
The ministry of Petroleum is scheduled to propose amendments in legislation before the Standing Committee. The federal government has already introduced the Petroleum Products (Petroleum Levy) Amendment Bill 2011 in the National Assembly and the Senate. The Bill proposes to make amendments in the Petroleum Ordinance 1961 to re-impose the PL on locally produced LPG after it was suspended by LHC. Industry sources term the Amendment Bill 2011 as Ministry's attempt to give a legal cover to a highly controversial policy.
It merits mention here that the federal government has moved two separate bills in the Parliament to impose tax on Natural Gas and LPG, respectively. While the 'Natural Gas Cess Bill 2011' envisages to impose tax on natural gas for the purpose of development of infrastructure (such as LNG and Iran-Pakistan gas project), no rational has been provided for making amendments to the Petroleum Ordinance 1961.
The industry sources contended that the Policy has been drafted behind the closed doors without seeking any input from other stakeholders. According to the industry sources the Policy has been designed to favor Sui Southern Gas Company (SSGC) which is in process of acquiring an LPG import terminal from Progas. SSGC and Sui-Northern Gas Pipeline Company (SNGPL) have re-entered the LPG marketing business in spite of the fact that the same companies had left the LPG business more than a decade ago.
It is pertinent to mention that SSGC and SNGPL's action to re-enter the LPG business is also in contravention to the decision of Council of Common Interest (CCI), which hinders government's entry in operation of any entity once the same has been privatized.