APCNGA urges govt to waive off duty on LNG

KARACHI: The high price of locally produced LNG has prompted the All Pakistan CNG Association to urge the government to allow duty free import of liquid natural gas (LNG) on Tuesday.

The body has urged the government to also put a limit on indigenous production of the gas since imported commodity is coming cheaper. The association said that the move will help create reserves of the resource in case prices in international market jump.

APCNGA Central Chairman Ghiyas Abdullah Paracha said that with increased import, the government can also save revenue spent on providing hefty subsidies. He said that it will spur economic activity through availability of economical gas and electricity and resolve unemployment in coming days.

“Oversupply in the international market is a golden opportunity which should not be missed,” Paracha said.

Energy sector stakeholders believed that the international oil price wars my not end soon causing LNG prices to remain depressed.

With lockdown taking over most countries, triggering weak economic outlook and an obvious dip in demand has pushed the natural gas prices to sink. Energy experts say the prices may further sink if more countries observe lockdown aiming to contain the spread of coronavirus.

Pakistan Bureau of Statistics has revealed that the country’s LNG imports amounted $2.05 billion in the first eight months of this fiscal year which is 0.5 per cent lower as compared to same period of last year.

Pakistan LNG Limited, that regulates import and distribution of LNG has not issued new tenders after its last supply in February. APCNGA chief says the local CNG sector is facing difficulty as sales are affected and payments of rents and salaries to staff are on hold.

He said that the government should provide a bailout package for the sector which is capable of bringing sizeable investment into the economy.

Liquefied Petroleum Gas Industries Association Pakistan (LPGIAP) Chairman Irfan Khokhar has also requested the government to exempt the LPG industry from closure, as it would help facilitate consumers in getting regular supply of gas at the rates notified by the Oil and Gas Regulatory Authority.

“There are a number of areas in the country where the facility of natural gas does not exist, and the people rely on other fuels like LPG.” Khokhar added that consumers were facing difficulties in various localities due to closure of shops and non-availability of LPG. He expressed concerns that the situation could lead to black-marketing.

“Almost 200 LPG marketing companies were operating across the country and providing gas to consumers at prescribed rates. Last year, the country imported around 224,026 MT LPG and produced 793,952 MT locally, adding the commodity supply remained smooth due to effective policies introduced by the Petroleum Division,” he added.

The chairman said LPG was 65 and 20 percent cheaper than petroleum products and CNG respectively, adding that increased use of the LPG in auto sector would help reduce the oil import bill of the country.