LNG imports will be worth billions of dollars and will affect the economic lives of almost every Pak
Pakistan Tehreek-e-Insaf has raised serious concerns about the Governments attempt to bypass the parliament and force an LNG pricing formula through a statutory regulatory order (SRO). The LNG imports will be worth billions of dollars and will affect the economic lives of almost every Pakistani citizen and hence must be presented before the parliament to ensure transparency and allow the elected representatives of the people to play their role in ensuring that no closed door deals impose inordinate burden on the people of Pakistan. This was stated by Asad Umar, MNA, who heads PTI policy, media and marketing.
He stated that every aspect of the LNG transaction is shrouded in secrecy. From purchase to storage and re gasification to transmission to sale , the details of none of these contracts have been disclosed to the parliament. If the government has nothing to hide then why are these contracts not being shared with the parliament?
Amongst the questions that need to be answered on the floor of the house include the specific company from which LNG is being purchased and the beneficial ownership of that company. Simply stating that it is coming from Qatar means nothing . Since the imports are being made without any written contracts how is transparency and cost effectiveness being ensured? What method was used to get multiple competitive bids and what were the results of the bids received? The LNG policy 2011 states that the ex flange price shall include the import price and a reasonable rate of return on the investment made in the terminal. What steps have been taken to ensure reasonableness of the rate of return? What is the expected rate of return?
What is the formula being used to determine the margins for the importing company? What is the benchmark for this formula? How will the returns for the companies distributing LNG through their transmission network be determined? These companies are monopolies and have large private shareholding so the regulator has to play a proactive role in determining these returns and the parliament has to be allowed to look into the returns being allowed to the entire value chain as it will become the precedent for the entire LNG import business worth billions of dollars a year over many years to come.
Umar said that the Government keeps on claiming that billions will be saved thru LNG imports. However, we demand that the Government present on the floor of the house the comparison between the delivered cost of the per MBTU LNG imported so far and sold to the customer versus the per MBTU cost of furnace oil during the same period so that the nation could know if the claims of billions of dollars of saving are actually being realized.
He said that we are being forced to ask these questions through the media because the Government kept of dilly dallying when asked these questions earlier and now for the last two months is refusing to call a session of the National Assembly as if all problems of the citizens of Pakistan have been resolved and the Government has run out a legislative agenda.