ISLAMABAD - Terming the gas tariff hike inevitable, Minister of State for Petroleum Musadik Malik has said that the Sui gas companies would go bankrupt if the prices were not jacked up.
The govt doesn’t have enough money to buy expensive gas and provide it on cheaper rates to consumers, Musadik Malik said while briefing the Senate Standing Committee on Petroleum. The Senate Standing Committee on Petroleum met under Senator Mohammad Abdul Qadir. Besides, Musadik said that after amendment in Oil and Gas Regulatory Authority rules, the govt powers, to control the hike in gas tariff, were limited. Further elaborating the MOS statement, secretary Power Division said that the laws have been amended now, if the government does not increase the price of gas on OGRA proposal, then the price will increase automatically in 40 days.
Minister of State remarked that the assets and profit of Sui gas companies are decreasing and if they (Sui companies) continue to work in this manner they companies will go bankrupt. The committee was informed by the Secretary Petroleum that the gas sector circular debt has reached Rs 1500b. Chairman Committee inquired as to what is the criteria for fixing of gas prices and its distribution. He was of the view that domestic consumers should be given the top priority in that regard. CNG sector should be allowed to import gas on their own in order to reduce the burden on government. Gas distribution should be prioritized sector wise, he added. Chairman committee remarked that direct subsidy to fertilizer industry is not sustainable. Senator Mohammad Abdul Qadir expressed his reservations on the mounting circular debt which currently stands at Rs 1500 billion. Abdul Qadir stressed the need to find a permanent solution to this recurring problem.
| Minister of State for Petroleum says Sui gas companies will go bankrupt if prices not jacked up
Govt doesn’t have enough money to buy expensive gas and provide it on cheaper rates to consumers
Minister of State for Petroleum Division Senator Musadik Masood Malik told the committee that there was no MoU regarding the purchase of cheaper fuel from Russia. He said that oil smuggling from Iran has been increased. Senator Rukhsana Zuberi said that substandard fuel is being sold in the country, which is causing respiratory disease. The Committee discussed the relevant rules, which allow the Oil Marketing Companies to mix High Octane Blending Component (HOBC97). Minister of State for Petroleum Division Senator Musadik Masood Malik told the Committee that ministry only regularizes those products which are utilized by masses at large scale like RON 92 and HOBC97 does not fall in this category. Abdul Qadir advised the ministry to at least check the authenticity of this new product.
The Committee also deliberated on the problems faced by KCCI regarding gas supply. President Karachi Chamber of Commerce & Industry briefed the Committee about the grievances of industrialists which includes non-availability of gas for industrial sector for last four months. The chairman Committee Senator Mohammad Abdul Qadir opined that the major cause behind the current economic deterioration is a gap between import and export value and to bring down this trade deficit, we need to give incentives and boost our local industries. He further requested Minister of State for Petroleum Division Senator Musadik Masood Malik to pay attention to the concerns of Karachi industrialists and come up with appropriate solutions. The Committee considered the public petition on the issue of meter tampering and over billing referred by the Chairman Senate. Chairman Committee pronounced that the services of independent third party should be hired, which will help the authority in detection of theft through scientific means.
The meeting was attended by Senator Fida Muhammad, Senator Engr. Rukhsana Zuberi, Senator Afnan Ullah Khan, Senator Shammim Afridi, Senator Saifullah Abro Minister of State for Petroleum Senator Musadik Masood Malik, Secretary for Ministry of Petroleum, Chairman OGRA Masroor Khan, members of Karachi Chamber of Commerce and Industries and other senior officers of ministry and Sui Southern Gas Company as well.
The govt doesn’t have enough money to buy expensive gas and provide it on cheaper rates to consumers, Musadik Malik said while briefing the Senate Standing Committee on Petroleum. The Senate Standing Committee on Petroleum met under Senator Mohammad Abdul Qadir. Besides, Musadik said that after amendment in Oil and Gas Regulatory Authority rules, the govt powers, to control the hike in gas tariff, were limited. Further elaborating the MOS statement, secretary Power Division said that the laws have been amended now, if the government does not increase the price of gas on OGRA proposal, then the price will increase automatically in 40 days.
Minister of State remarked that the assets and profit of Sui gas companies are decreasing and if they (Sui companies) continue to work in this manner they companies will go bankrupt. The committee was informed by the Secretary Petroleum that the gas sector circular debt has reached Rs 1500b. Chairman Committee inquired as to what is the criteria for fixing of gas prices and its distribution. He was of the view that domestic consumers should be given the top priority in that regard. CNG sector should be allowed to import gas on their own in order to reduce the burden on government. Gas distribution should be prioritized sector wise, he added. Chairman committee remarked that direct subsidy to fertilizer industry is not sustainable. Senator Mohammad Abdul Qadir expressed his reservations on the mounting circular debt which currently stands at Rs 1500 billion. Abdul Qadir stressed the need to find a permanent solution to this recurring problem.
| Minister of State for Petroleum says Sui gas companies will go bankrupt if prices not jacked up
Govt doesn’t have enough money to buy expensive gas and provide it on cheaper rates to consumers
Minister of State for Petroleum Division Senator Musadik Masood Malik told the committee that there was no MoU regarding the purchase of cheaper fuel from Russia. He said that oil smuggling from Iran has been increased. Senator Rukhsana Zuberi said that substandard fuel is being sold in the country, which is causing respiratory disease. The Committee discussed the relevant rules, which allow the Oil Marketing Companies to mix High Octane Blending Component (HOBC97). Minister of State for Petroleum Division Senator Musadik Masood Malik told the Committee that ministry only regularizes those products which are utilized by masses at large scale like RON 92 and HOBC97 does not fall in this category. Abdul Qadir advised the ministry to at least check the authenticity of this new product.
The Committee also deliberated on the problems faced by KCCI regarding gas supply. President Karachi Chamber of Commerce & Industry briefed the Committee about the grievances of industrialists which includes non-availability of gas for industrial sector for last four months. The chairman Committee Senator Mohammad Abdul Qadir opined that the major cause behind the current economic deterioration is a gap between import and export value and to bring down this trade deficit, we need to give incentives and boost our local industries. He further requested Minister of State for Petroleum Division Senator Musadik Masood Malik to pay attention to the concerns of Karachi industrialists and come up with appropriate solutions. The Committee considered the public petition on the issue of meter tampering and over billing referred by the Chairman Senate. Chairman Committee pronounced that the services of independent third party should be hired, which will help the authority in detection of theft through scientific means.
The meeting was attended by Senator Fida Muhammad, Senator Engr. Rukhsana Zuberi, Senator Afnan Ullah Khan, Senator Shammim Afridi, Senator Saifullah Abro Minister of State for Petroleum Senator Musadik Masood Malik, Secretary for Ministry of Petroleum, Chairman OGRA Masroor Khan, members of Karachi Chamber of Commerce and Industries and other senior officers of ministry and Sui Southern Gas Company as well.
