Friday, January 22, 2010

Pak govt may allow fuel oil blending

By Sarfraz Ali

The government is likely to allow fuel oil blending in the country soon. Chairman of Oil and Gas Regulatory Authority (OGRA) Tauqir Sadiq while speaking at the second meeting of FPCCI Standing Committee on Petroleum Products at Federation House asked all the stakeholders to give their proposals on the subjects seeking government permission in this regard.

He said that the government would support every proposal, which is in the favour of the country and beneficial for the consumers. He invited proposals from all the stakeholders and said that the government would grant permission for fuel oil blending in the country within days.

The chairman OGRA said that being the regulator of oil and gas sector, he would welcome every proposal and suggestion from the industry. He said OGRA is committed to provide level playing field to all the market participants. He said that there is shortage of gas in the country, as the existing reserves of gas are continuously decreasing while gas exploration activities remained low due to law and order situation mainly in Balochistan. On the other hand, he added, the dependence on gas for power generation has massively increased. The high demand against less supply led to a surge in gas prices in the country, he noted.

Speaking on the occasion, former president FPCCI, S.M. Munir said that the gas and power tariffs are being increased on the directives of IMF. "The baggers have no choice except to follow the directives of donors," he added.

He said industry in Pakistan is facing difficulties to run their business. He pointed out that only textile industry is facing losses of one billion rupees per month due to power shortage and tariff increase. He said that the country's export target is unlikely to be achieved, so the government should take measure to solve the issues being faced by the industry.

Vice President, FPCCI, Zakria Usman, said that the country's exports are continuously declining. The recent hike in gas and power tariff has further deepened the concerns of the industry, as cost of doing business would further increase. Mian Zahid Hussain Chairman All Pakistan Lubricant Manufacturers Association said the local lubricant industry is producing around 200,000 tons of lubricant oil against the total demand of 400,000 tons in the country.

He pointed out that illegally imported and fake lubricant oil is being sold in the country. He suggested that the government should remove excise duty on lubricant oil so that the industry could be able to compete in the market. Chairman OGRA asked to point out the locations of illegal manufacturers of lubricant, assuring that the regulator will take action against the miscreants.

Various issues including oil and gas pricing and energy crisis were discussed in the meeting. The meeting was told that the energy demand has almost doubled in the last ten years. However, any single power generation plant was not set up in this period. The gas supply to industry has increased by 13 percent.

The energy cost has increased by 100 percent. On the other hand, a circular debt of Rs 82 billion remained another issue in this regard. The participants of the meeting were of the view that the energy crisis will continue in days to come. They said that the government should take necessary measures and efficient management to address the issue.

The chairman FPCCI Standing Committee on Petroleum Products, Malik Khuda Baksh, Abbas Bilgrami MD Progass, Abdul Hadi Khan, Chairman LPG Distributors Association, Abdul Sami Khan, Chairman Petroleum Dealers Association, Kaleem Siddiqui, President Byco Petroleum (Bosicor Pakistan), Mumtaz Hassan Khan Chairman Hascol Pakistan and Ejaz Ali Khan from Overseas Oil Trading Limited attended the meeting.

Sarfraz Ali is staff member of Daily 'The Nation'. (This news item also published in Daily 'The Nation')

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