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PQA’s port charges per LNG cargo highest in the region, CCOE told

National

March 5, 2021

ISLAMABAD: The Port Qasim Authority’s port charges for one LNG cargo in Pakistan’s port are the highest in the region, which is another reason behind the massive hike in the price of product for end consumers.

The Port Qasim Authority charges USD600,000-750,000 per LNG cargo since 2015, but despite that there are no facilities for LNG vessels. The Petroleum Division has sensitized the participants of the Cabinet Committee on Energy (CCOE) that met here on Thursday with Federal Minister for Planning, Development and Special Initiatives Asad Umar in the chair, about the highest port charges.

The CCOE considered the Petroleum Division’s proposal for reduction of port charges on LNG by PQA based on independent assessments. It also emphasized the need for empowered and development work at Port Qasim as an independent assessment.

The CCOE directed the Ministry of Maritime Affairs to start infrastructure development work of Port Qasim Authority as the top-most priority.

According to the calculations by the Petroleum Division, the PQA port charges are 300 percent more than those of the regional ports. It desired the LNG pilotage and towage rate comparable to the rates of regional ports and that number should not be more than (USD 2 per Gross Registered Tonnage).

The PD also wants the PQA to utilize the already-collected Channel Development Cess (CDC) for widening and development of the channel, before collecting additional CDC. It also aspires for independent evaluation for an optimally-competitive GRT rate post 2021 when private terminals are likely to start up.

The main components of the PQA charges are pilotage, towage, and the Channel Development Cess (CDC). The pilotage charges are USD370,000 per Gross Registered Tonnage (GRT) and the CDC is USD100,000 per vessel. Under other components, the PQA also charges $600 in the head of additional pilot (Inward), $1,800 in the head of escorting (hire of tugs) Inward, $13,500 under standby tug services for LNG and $1,800 under standby services of pilot for LNG, $1,800 for escorting the vessel outward, $600 for additional pilot (outward), $30,000 in the head of port dues. The PQA also charges $16,000 for berths, $210 for pipeline charges, $37,000 in the head of monsoon charges and if the 13 percent sales tax is imposed by government of Sindh, then total charges on one LNG cargo stands at $647,840 at Port Qasim alone.

However, total charges per LNG cargo that range at Port Qasim Authority (PQA) from USD600,000 to USD750,000 which is 300pc more than the average of other regional ports. India is getting port charges of USD22,000 per LNG cargo at its port of Dabhol, USD40,000 at Bahej, USD150,000 at Hazira, and USD90,000 at Kochi and Banglages is getting port charges of USD340,000 on one LNG vessel. Taiwan is getting USD110,000 per LNG cargo, China is getting USD 170,000-280,000 at three ports, Japan USD 90,000-110,000, Turkey USD120,000-196,000 and UAE USD95,000 per LNG vessel. PSO and PLL are of the view that the CDC should be collected for the first 200 LNG carriers.

The PQA communicated that it will continue charging the CDC until the complete recovery of its investment cost which was not provided. A total of USD47.5 million CDC has been collected till 07-02-2021 for infrastructure development at Port Qasim.

At present, LNG vessels' passage adversely affects the movement of other ships. Due to unavailability of night navigation, charter cost is affected which is ultimately reflected in higher price of LNG.

The working of Petroleum Division also unfolded that under the pilotage fee, initially PQA charged USD1 million per LNG vessel starting from March, 2015. Pilotage and towage is the largest component of PQA's LNG port charges (initially USD 600,000 out of total charges of USD 1 million per vessel).