The News (International ).........................OCT 12,2011.
LAHORE: Amid a catastrophic energy crisis, government policies, intentionally or unintentionally, appear to be aimed at discouraging various options of using locally produced fuels, thereby preventing bids of diversifying energy mix that can ultimately lead towards easing fuel supplies.
One such example is Liquefied Petroleum Gas (LPG). Owing to reasons best known to policy makers, share of LPG in energy mix cannot be increased which has been on the decline. Pakistan can increase local LPG production by 700 tons per day to not only become self-sufficient but also enter the export market. This huge volume of LPG is not being extracted from national gas network. The federal government will not require any finances for extracting this LPG as private sector is more than willing to do so.
According to industry sources, Pakistan has reserves of 700 tons per day from existing gas fields including Sinjhoro, Kunnar Pasaki Deep, Tando Allahyar. It can be marketed locally at a cost far below the benchmark Saudi price.
The exploitation of locally available LPG would also help minimize its domestic price, besides providing more fuel options to energy-deficient consumers and reducing undue demand of various fuels. Last but not the least, less imports simply means less trade deficit with other allied benefits to national economy.
Ignoring these merits, the government has opted for a major policy shift making environment conducive for increasing import. Total local LPG production is 1,208 tons per day contributed mainly by two major companies. There is potential for new entrant for exploiting local resources but nothing has been done in this regard.
Lately, owing to a sea change in the LPG policy, Petroleum Levy (PL) has been imposed on local LPG to bring the local producer prices on par with the imported LPG prices. This policy too was finalized without consulting any stakeholders.
The government not only violated the simple principle of contemporary governance model by unilaterally imposing a policy alone, it has also started an open policy of discouraging private sector and in return enhancing influence of public sector in doing business. Under the new initiative, both government-owned Sui Northern and Sui Southern have been given task by the government to revert back to LPG business. This change in policy is in contrast to government’s stated position that doing business is not the job of public sector and it only has a role of facilitator.
One such example is Liquefied Petroleum Gas (LPG). Owing to reasons best known to policy makers, share of LPG in energy mix cannot be increased which has been on the decline. Pakistan can increase local LPG production by 700 tons per day to not only become self-sufficient but also enter the export market. This huge volume of LPG is not being extracted from national gas network. The federal government will not require any finances for extracting this LPG as private sector is more than willing to do so.
According to industry sources, Pakistan has reserves of 700 tons per day from existing gas fields including Sinjhoro, Kunnar Pasaki Deep, Tando Allahyar. It can be marketed locally at a cost far below the benchmark Saudi price.
The exploitation of locally available LPG would also help minimize its domestic price, besides providing more fuel options to energy-deficient consumers and reducing undue demand of various fuels. Last but not the least, less imports simply means less trade deficit with other allied benefits to national economy.
Ignoring these merits, the government has opted for a major policy shift making environment conducive for increasing import. Total local LPG production is 1,208 tons per day contributed mainly by two major companies. There is potential for new entrant for exploiting local resources but nothing has been done in this regard.
Lately, owing to a sea change in the LPG policy, Petroleum Levy (PL) has been imposed on local LPG to bring the local producer prices on par with the imported LPG prices. This policy too was finalized without consulting any stakeholders.
The government not only violated the simple principle of contemporary governance model by unilaterally imposing a policy alone, it has also started an open policy of discouraging private sector and in return enhancing influence of public sector in doing business. Under the new initiative, both government-owned Sui Northern and Sui Southern have been given task by the government to revert back to LPG business. This change in policy is in contrast to government’s stated position that doing business is not the job of public sector and it only has a role of facilitator.