Petroleum product prices to be reduced Aug 1: Asim

LAHORE: Adviser to the Prime Minister on Petroleum, Dr Asim Hussain, said on Tuesday that the prices of POL products would be reduced on the first of August because the government had adjusted the margins of oil marketing companies (OMCs) which had made huge profits in the past.

Speaking at the Lahore Chamber of Commerce and Industry, he said the Oil and Gas Regulatory Authority had been directed to make public oil companies’ formula to fix prices on Thursday.

He said the petroleum development levy was a fixed tax and it was far less than the amount levied in other countries.

Dr Hussain said the government had decided to open 90 petrol pumps across the country where ethanol blended petrol called E-10 gasoline would be sold. The fuel was not only cheaper but also environment-friendly, he added.

He said oil, gas and water crises could aggravate in the coming years because consumption was increasing fast.

He said industry was on the priority list for provision of gas, but line losses in Pakistan were eight to nine per cent of total consumption.

He said the government was working on short-, medium- and long-term solutions to overcome energy crisis and was expecting foreign investment of $10 to 15 billion in this sector during the next five years.

The adviser said that the country faced 650 mmcf gas shortage last year which was expected to go up to 800 to 850 mmcf with the setting up of 2,000 new CNG stations in Punjab and 450 in Sindh. The situation required serious efforts for energy preservation, he added.

In his address, LCCI President Mian Muzaffar Ali stressed the need for reducing the margin of OMCs.

He said the high price of petroleum products were adding to the cost of doing business and making products less competitive for the international market. The petroleum development levy was a huge burden on consumers because the general sales tax was already being collected on the sale of petroleum products, he added.

The LCCI chief called upon the adviser to open more blocks for exploration of oil, gas and other valuable minerals. The deal with Qatar for import of liquefied natural gas was very appreciable but there was need to expedite the matter, he added.

Talking to newsmen after a meeting with businessmen at the Governor’s House, Dr Hussain said the country was producing 3.9 billion cubic feet (bcf) of gas against a requirement of eight bcf.

He said the government had adopted a three-pronged strategy to tackle gas shortage. Under short-term measures, liquefied natural gas would be imported next year while liquefied petroleum gas projects were being installed.

The adviser said foreign companies would also be invited to invest in oil and gas exploration projects under a mid-term strategy while new projects to explore alternative energy sources would be initiated under a long-term policy.

To a question, Dr Asim said that a gas project with Iran would be completed within the next few years.

He said the Sui Northern Gas Pipelines had started a topographic survey for the Iran-Pakistan gas pipeline project and an area spread over 100 kilometres had been covered.