Petroleum Minister Holds PD, Qatar LNG Responsible for Default in Gas Sector
Ali Pervaiz Malik says he is trying best to resolve issues of Refineries to attract $6B Investment
Staff Report
Islamabad: Petroleum Minister has blamed the second LNG contract with Qatar for current default in gas sector which has led to the circular debt.
He said that government would review the LNG deal with Qatar by keeping in view country’s interests.
While talking to media, petroleum minister Ali Pervaiz Malik told media here on Thursday that second contract of LNG with Qatar had resulted in gas issues.Refineries’ Margins Decline
“ Pakistan might not have such situation in case there not been second LNG deal with Qatar,” minister said adding that government would take the decision of revising LNG deal with Qatar which is due in 2026, keeping in view the country’s interest.
Minister said that expensive RLNG compelled the government to suspend indigenous 300 mmcfd gas production and trying to manage the supply and demand side.
Responding to recently increase fix gas charges, he said that Rs 150 billion subsidy to protected gas consumers in addition to Rs 250 billion RLNG diversion from power to domestic consumers compelled the government to increase the fix charges by Rs 200, added that the system gas was still cheaper than the LPG. “We are in IMF program which wants zero deficit,” Pervaiz Malik said.
He said that Pakistan had invited Chinese, Russian and US companies to participate in mining projects in Pakistan.
“ We are offering equal opportunities to Russia, China and United States (US) to engage in mining sector.
Responding to a question, he ruled out discrimination in awarding mining contract to any country.
“I have been to Russia and offered Russian companies to invest in mining sector,” he said adding that any company from these countries can participate in a bid when we offer.
Responding to a question regarding waiver for oil and gas from Iran, he said that ministerial committee was working which would take a decision in this regard.
He said that Pakistan and Iran have been in arbitration in Paris on Iran Pakistan (IP) gas pipeline project and a ministerial committee was looking over the situation after Iran-US war.
About Refineries upgradation, he said that demand of refineries were justified and added that tax had been exempted on output and their margin had been regulated. “This is against basic principle,” he said adding that undue burden should not be put on the refineries if government wants them to invest $5-$6 billion in upgradation projects. He said that zero rating matter was taken up with the IMF which said that ‘zero rate’ will not work.
The government had exempted sales tax in budget 2024-25 which had resulted in loss of Rs 34 billion for refineries and IMF. The government had also committed to impose sales tax up to 5 percent in budget 2025-26 but government had continued zero rating which had irked the refineries, putting $6 billion planned investment in refining sector.
“I have tried my best to resolve issues of refineries and finance minister had agreed to resolve it,” minister added.
Regarding oil and exploration sector, he criticized that exploration companies have faced 40 percent corporate tax which was very high and would hurt indigenization efforts of the government to explore oil and gas.
