Monday January 24, 2022

LNG terminals allowed to augment regas via third parties

August 01, 2019

ISLAMABAD: The Economic Coordination Committee (ECC) of the cabinet on Wednesday allowed liquefied natural gas (LNG) terminals to increase regasification by allocating additional capacity to third parties and it also slapped a 10 percent regulatory duty on cotton import.

The ECC took the decisions at a meeting presided over by Adviser to the Prime Minister on Finance and Revenue Hafeez Shaikh.

The finance ministry said the existing two LNG regasification terminals – Engro Elengy Terminal Private Limited and Pakistan Gas Port Consortium Limited – were allowed “to allocate additional regasification capacity of terminal, if any, to third parties on a commercial basis under mutually agreed arrangements subject to certain conditions”. The LNG terminals have 1.2 billion cubic feet per day of regas capacity.

The ECC also approved the authorisation of the Central Power Purchasing Agency to sign the interim agreement regarding revised payment terms for generation on LNG by Altern Energy Limited, Kot Addu Power Company Limited and state-owned power generation companies and extension of interim agreement signed with Fauji Kabirwala and Rousch Power Limited, expired on June 30, 2018.

On the summary moved by the ministry of national food security and research, the ECC decided to impose 10 percent regulatory duty on cotton import. The ECC meeting also took up an issue of increased prices of roti and approved a proposal submitted by the ministry of energy to revise gas prices for roti tandoors with effect from 1 July, 2017.

The ECC decided to provide relief to the masses by reverting the gas prices for roti tandoors to the position of 30 June, 2019.

“The decision was taken despite the fact that price of wheat, which contributes 55 to 60 percent to the price of the roti, had remained unchanged, while the gas bills, which contribute 20 to 25 percent to the price of roti, had also not been issued yet under the new tariff having come into effect from 1 July, 2019,” the finance ministry said in a statement.

Under the decision, a detailed survey of the tandoors across the country would be carried out to ensure that the benefit of revision in gas tariff is made applicable to standalone tandoors or roadside restaurants, catering to the poor and no undue benefit is passed on the tandoors in hotels or larger restaurants, which are to be treated as commercial gas connections.

The ECC called for effective price control by provincial governments and relevant authorities to ensure the sale of roti at its old price and decided to review the decision after three months in case the tandoor owners fail to pass the benefit of reduced gas prices to the common man.

The meeting was told that there were 7.635 million tons of wheat stocks available with Pakistan Agricultural Storage and Services Corporation and provincial food departments.

The meeting was told that there had been a considerable reduction in wheat prices in the market after the imposition of the ban on the export of wheat and wheat flour, and the situation would eventually reduce the prices of roti and naan in the market.