Advance Purchase of Petrol leads to Rising Price despite low global prices
The Advance Purchase of Petrol has led to a rise in fuel and petroleum products in Pakistan, despite a dip in global prices.
The petroleum division on Tuesday revealed Pakistan’s expensive gasoline prices despite a global decline.
The Committee took serious note of the absence of the Minister and Secretary of the Ministry of Petroleum.
Among the topics discussed were the reasons for the increase in petroleum prices, a briefing by PLL on actions taken for the long-term allocation of LNG terminals to private firms, and a briefing by SNGPL on the current status of its Board’s approval of the Initial Access Agreement with the private shipper UGDC (BoD).
Discussing the current state of the global Oil and Gas markets, the Committee questioned the Ministry regarding Pakistan’s expensive gasoline prices despite a global price decline.
The Committee was informed that the increase in fuel and petroleum products in Pakistan, despite decreased global prices, was due to the advance purchase of petrol.
A second cause for the increase was the monthly application of PDL per IMF accords. The Committee emphasised the importance of taking severe measures to aid the common man in Pakistan.
The Committee was informed by PLL that the ECC/Cabinet approved the allocation of GOP’s contractual utilised capacity on a rolling three-month basis to assist private sector imports of LNG that are linked to terminal capacity.
PLL is working on both short-term and long-term LNG supply contracts; consequently, the viability of long-term tenders is not wise because it would limit the government’s flexibility to adjust LNG imports to satisfy domestic demand.
Possible extension of the existing short-term allocation period beyond three months, contingent on the response of LNG providers to the next PLL tender. In addition, the parties will be expected to agree on a framework for price disparity recovery.
Regarding the import of Liquefied Natural Gas (LNG) by private companies in the country and the current status of the approval of the Initial Access Agreement with private shipper UGDC by its Board of Directors (BoD), the Committee was informed that, per TPA Rules and Network Code, gas supply can only be provided up to the industrial supply main on the distribution network.
The OGRA has clarified that transportation services can be supplied outside of industrial supply mains. SNGPL has filed a petition for review prior to the Authority’s response, which is now sought from OGRA.
The President of the All Pakistan CNG Association was of the opinion that when the Oil and Gas market is opened to private companies, it will play a crucial role in regulating gas prices and assuring the influx of foreign currency.
He claimed that OGRA supports an open strategy that will demonopolize the market. Senator Abdul Qadir, chairman of the committee, weighed the benefits and cons and concluded that the Private Sector must be permitted to enter the oil and gas market in Pakistan.
