ISLAMABAD - The government, as per procurement laws, is bound to inform the people of Pakistan about the LNG price deal but at the same time it is bound to keep it concealed as per the requirement of international sellers that has put it in a complicated situation.
The ongoing LNG deal between Pakistan and Qatar has created many doubts as the government is hesitant to share the prices. International market trends explain that LNG is different in nature as compared to crude oil and its prices are not announced on daily basis. Most of the times, the prices are fixed through negotiation between the buyer and seller. In this case for one buyer the price can be higher and lower for another, based on the suitability of both the parties that also involves the volume of purchase, long or short term business deal and sometimes demand and supply factors at some certain time when the deal is being made.
In such a situation, it is always better that the government must not jump in directly in these kinds of deals. Because the sellers are interested to keep the prices concealed as opening the prices affect their deal with other buyers, it is better that the private companies should import their LNG and sell it to their target market.
Government’s decision to import LNG by itself has put it in a bad condition and has raised many questions. Certain quarters even smell a rat in the ongoing LNG deal between Qatar and Pakistan. Government of Pakistan, as per procurement laws, is bound to open the deal but it is unable to do so because it is one of the conditions of seller that it can’t be. Shahid Khaqab Abbasi in a media briefing few weeks back personally expressed that as per the international market rule, LNG prices cannot be revealed.
Well informed sources are terming this deal illegal with regards to the procurement laws of the country. Sources said that the government is in a fix due to the wrong step it has taken, involving the state organization (PSO) in the LNG deal. Now the situation is that the government is trying its level best to conceal the prices as it has committed with the seller to do so but on the other side the pressure is mounting to open up the deal for the public.
Had the government allowed private sector to import LNG, it could avoid all the questions coming from all sides because private investors are not bound to tell their import prices to the general public. In case of private investors, they are bound to mention their cost to the government but the government is not bound to further disseminate that price to the public but can ask for the prices to settle a price for the end user such as in the case of CNG stations.
The sources said that the government should have included private investors and allowed them to import LNG at the first stage. They said that with the passage of time, the government will have to hand it over to the private investors to make it a legal transaction, otherwise serious transparency issues will take place that the government would be unable to tackle.