Karachi: The All Pakistani CNG Association (APCNGA) urged the government on Tuesday to lift import duties on liquefied natural gas (LNG) and limit local production because imported goods are already cheaper than locally produced natural gas.
Ghiyas Abdullah Paracha, the central chairman of APCNGA, said such a decision would help to save precious and scarce natural gas resources in the event that liquefied natural gas prices on the international market rise.
Paracha said that increased imports of LNG will help lower natural gas prices without spending large subsidies. He added, “This will generate economic natural gas and electricity, which will cause economic activity and provide employment for hundreds of thousands of unemployed.”
Industry insiders believe that the price war between Saudi Arabia and Russia will not end anytime soon, and LNG prices are likely to remain low if oil prices do not recover. “The oversupply of international markets is a once-in-a-lifetime opportunity,” said Paracha.
Weak economic prospects and a diminishing demand to halt the extreme global efforts of the corona virus have led to rising natural gas prices. Analysts believe that demand may decline further as more countries announce blockades and other measures to better control the spread of the virus.
According to statistics from the Pakistan Statistics Bureau (PBS), the country’s LNG imports for the first eight months of the fiscal year were $ 2.05 billion, down about 5.0% compared to the same period last year.
The state-run Pakistan LNG Co., Ltd., responsible for the import and distribution of LNG, did not launch a final tender for spot purchases after the last delivery was released in February 2020. Paracha said the local compressed natural gas industry was the first to fall victim to the sale. Pause, CNG operators are struggling to pay staff hires and salaries.
He demanded that the government cut taxes on the compressed natural gas industry and announce a rescue package so that the industry, which has attracted a lot of investment, can survive. Khurran Shehzad, CEO of Alpha Beta Core, said it was not possible to calculate the cost of local natural gas production per million British thermal units, “but it is safe to say that imported natural gas is now much cheaper than locally produced natural gas.”
At the same time, Irfan Khokhar, president of the Pakistan Liquefied Petroleum Gas Industry Association (LPGIAP), in a related development, has requested the government to exempt the LPG industry from closure, as this will contribute to regular consumer reports against the oil and gas gas reported rates. Get gas. Regulators.
“There are no natural gas installations in many parts of the country and people rely on other fuels, such as LPG.” Speaking to APP, he said it is important for LPG retailers, production plants and carriers (LPG Bowsers) to operate and ensure smooth delivery of goods across the country. Khokhar said that consumers in several regions are experiencing problems due to store closings and the unavailability of LPG. He was concerned that this could lead to a black market.
Khokhar said there are nearly 200 LPG sales companies operating across the country that supply consumers with natural gas at regulated prices. He said the country imported about 224,026 tons of LPG last year and locally produced 793,952 tons of LPG, adding that the supply of raw materials remained stable thanks to an effective oil sector policy.
The chairman said that LPG is 65% and 20% cheaper than petroleum products and compressed natural gas, respectively, adding that an increase in the use of LPG in the automotive sector would significantly reduce the country’s oil import costs.