Non compliance issue between SSGCL and JJVL

Muhammad Afzaal

Pakistan LPG Marketers Association (PLPGMA) has expressed concern over the non-renewal of the LPG agreement and appealed to Sui Southern Gas Company Limited (SSGCL) to arrive at an arrangement with JJVL to bridge the gap of 300 metric ton LPG.

LPG is used for cooking purposes in remote areas of the country where a network of gas utilities is not available.

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In a letter addressed to managing director Sui Southern Gas Company Limited (SSGCL), PLGMA said that in the larger interest of the country, an arrangement between the two concerned entities (SSGC &JJVL) may be arrived upon at the earliest so that this already fragile economic condition of the country can be saved from further adversity.

LPG markets body said that shutting down of JJVL Plant had resulted in cutting down of 300 MT per day local production of LPG. It said that the JJVL LPG extraction facility was producing approximately 300 MT per day. This indeed has created a big gap not only in demand /supply of the product but also has hit national reliance on a locally produced resource.

PLPGMA, as a registered body of LPG Marketing Companies in the Country, has great concern over this development. We understand that it has happened due to the expiry of the contract for extraction between SSGC and JJVL, Farooq Iftikhar chairman PLPGMA said.

It is also appreciated that the matter is a corporate one between the two entities and SSGC is free to take this decision, he said.

However, he said that it is pleaded that in the national interest, Self-Reliance, National Energy Security, conserving National Foreign Exchange Reserves, and lack of compliance to FATF that the situation might lead due to intricacies involved in LPG imports.

‘We believe that SSGC should have worked on enhancement of local production rather than curtailing or holding to current levels of production. In these unprecedented hard economic times such an act on behalf of SSGC has stunned us and created a quandary of already existing challenging times facing the country, he said and appealed that in the larger interest of the country, an arrangement between the two concerned entities (SSGC &JJVL) may be arrived upon at the earliest so that this already fragile economic condition of the country can be saved from further adversity.

The Oil and Gas Regulatory Authority (OGRA) on Tuesday notified an increase in the price of LPG by Rs 4 per kg for the month of July 2020. The 11.8 kg domestic cylinder will be available at Rs 1345.07, commercial Rs 4995. The regulator has notified the price for the month of July and now it would be available at Rs 114 per kg against Rs 110 per kg.

Following the suspension of the LPG extract agreement between SSGCL and JJVL, the prices of LPG will further rise in the coming months due to wiping out 300 metric tons of LPG from the system. The LPG is a fuel of poor man. Due to demand and supply issues, the dealers have not been selling LPG at a notified price of OGRA.