Oil prices rise due to advance purchase of gasoline, application of PL – Latest News – The Nation

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ISLAMABAD – A Senate panel was told on Tuesday that the rise in petroleum product tariffs in Pakistan, despite lower international crude oil prices, was due to the advance purchase of gasoline and the application of oil tax in accordance with IMF agreements.

The Standing Senate Committee on Petroleum, which met here under the chairmanship of Senator Abdul Qadir, discussed issues related to rising oil prices in the country and the utilization of the extra capacity at the Pakistan LNG Limited terminal (PLL) by private companies. Senator Fida Mohammad said petroleum products are getting cheaper in the world, they are getting more expensive in Pakistan. What is the reason for the increase in POL prices locally? He asked.

Discussing the current situation in the international petroleum market, the Committee questioned the Petroleum Division on the reason for the exorbitant gasoline tariffs in Pakistan despite falling prices globally. The Committee was informed that the reason for the increase in the prices of gasoline and petroleum products in Pakistan, despite the decline in prices globally, was that the gasoline had been purchased in advance. Another reason for the increase was the application of the PDL every month in accordance with IMF agreements. The Committee stressed the need to take stringent measures to facilitate the man of the people in Pakistan. Senator Saifullah Abro said steps should be taken to reduce the premium on petroleum products.

The committee heard that PSO had requested 100 billion rupees from the government. “We received a total of Rs 52 billion,” replied a PSO official. The chairman of the committee said, “I don’t think the government will be able to reduce the prices of petroleum products.”

The government has pledged to the IMF to collect 750 billion rupees on oil in the current financial year, the chairman of the committee said. Moreover, the government has not yet imposed the GST on petroleum products, he added. OGRA Chairman Masroor Khan, while responding to questions raised by committee members, said that the regulator sets tariffs based on the import price of petroleum products by OSP. Prices for petroleum products are not determined on the price of crude oil for a single day, President Ogra said. Ogra fully protects its customers, he said. The regulator cannot raise or lower the prices of petroleum products by itself, Masroor Khan added. He said Pakistan imported 70% of the gasoline needed, while 30% of the gasoline was produced by local refineries. Similarly, Pakistan imports 50% of high-speed diesel while the rest is produced by local refineries, he added.

The Committee took note of the absence of the Minister of Petroleum and Secretary of the Ministry of Petroleum. Issues that were discussed included the reasons for the increase in oil prices; briefing by PLL on the measures taken for the long-term allocation of LNG terminals to private companies; communication by SNGPL of the current status of the approval of the Initial Access Agreement with the private shipper UGDC by its Board of Directors (BoD). The committee was told by CFO Sui Southern Gas Company Limited (SSGCL) that K-Electric is to pay Rs 125 billion to Sui Southern. Why does K-Electric not pay government institutions? asked Saifullah Abro. He said that KE was increasing the revolving credit of the power sector and that apart from Sui Southern, KE was also to give 300 billion rupees to the federal government. K-Electric has become a mafia, Saifullah Abro remarked.

K-Electric ‘mafia’ to pay Sui Southern Rs 125 billion, Senate told

Informed by PLL of the steps taken for the long-term allocation of LNG terminals, the Committee was informed that the ECC/Cabinet has approved the allocation of capacity used under GOP contract on a three-month rolling basis to facilitate the import of LNG by the private sector which is linked to the capacity of the terminal. . PLL is working on short and long term LNG supply tenders; therefore, the feasibility of long-term tenders is not prudent as it will reduce the government’s ability to adjust LNG imports to meet demand in the country. The improvement of the current short-term allocation period beyond 3 months can be taken after reviewing the response of LNG suppliers in the next PLL tender. In addition, the parties will be required to agree on a framework for recovering any price discrepancy.

Regarding the importation of LNG by private companies into the country and the current status of the approval of the initial access agreement with the private shipper UGDC by its Board of Directors (BoD), the committee was informed that, in accordance with TPA rules and the network code, gas supply can only be provided up to the industrial supply line on the distribution network. OGRA has issued a clarification that transportation services can be provided beyond industrial supply networks. The chairman of All Pakistan CNG Association was of the view that when the oil and gas market is opened up to private players, it will play an important role in regulating gas prices, thereby ensuring the inflow of foreign currency. He asserted that the OGRA is in favor of an open policy which will demonopolize the market. The chairman of the committee, Senator Abdul Qadir, was of the view that the private sector should be allowed to enter the oil and gas market in Pakistan.

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