ISLAMABAD: Amid the increasing gas deficit in the country, LPG is also becoming pricier in all the four federating units, particularly in northern parts of the country.
However, after being given go-ahead by the ECC and ratification by the cabinet three months ago, the Jamshoro Joint Venture Limited (JJVL), an LPG extraction plant, has failed to resume operations, a senior official told The News.
"The JJVL with the capacity to produce 300-500 tons of LPG that accounts for 15 percent of total LPG supply in the country, is not operational since June 21, 2020 due to which the national kitty has suffered a loss of Rs 2.834 billion till November 30, 2020," the official told The News while quoting calculations on losses incurred by the SSGC due to the JJVL closure. “The LPG production by JJVL is enough to cater to energy needs of over 750,000 homes across Pakistan," the official said and added that with the closure of JJVL, 5,000 people have lost their jobs too.
The Sui Southern had stopped gas supply to JJVL and canceled its deal with the extraction plant on June 21, 2020 arguing that its agreement with JJVL was for a period of 18 months, which expired automatically after the Supreme Court of Pakistan verdict on December 4, 2018. However, the ECC approved the restarting of JJVL four months ago, which was also ratified by the federal cabinet. But it could not be made operational and because of this very fact, loss of foreign exchange incurred until November 30, 2020 on account of LPG and LNG import substituting local production of JJVL stood at $24 million.
The JJVL management, meanwhile, wrote to Federal Minister for Finance and Revenue Dr Abdul Hafeez Sheikh, reminding him that despite the approval of ECC and ratification by the federal cabinet, JJVL was yet to restart.
The management also submitted that the NAB has not given any restarting order. It also mentioned that NAB does not have any bearing on the working of JJVL plant. Regarding the Petroleum Development Levy (PDL), the letter cited a restraining order from the Lahore High Court for which the JJVL management is seeking early decision of the Supreme Court and requested the federal government for help. “We have already provided an undertaking that in case JJVL is directed to pay the PDL, the company shall do so," the company said.
In the country, only 24 percent consumers have access to piped natural gas facility while 76 percent consumers have to rely on LPG and other fuels like kerosene oil, and wood. The closure of JJVL plant has not only deprived the country of 15pc of LPG production but will also cause the company a revenue loss of billions of rupees.
The Petroleum Division spokesman said the commercial dispute between the JJVL and SSGC was being supervised by AF Fergusons as per the directives of Supreme Court of Pakistan (SCP) order and the case was pending in the Supreme Court of Pakistan. He said that JJVL collected petroleum levy from consumers and got a stay order from the Lahore High Court, withholding around Rs500 million.
The spokesman also said that the cabinet was advised to recover the full amount from the company before gas supply was resumed by the SSGC.
