Pakistan LPG Marketers Association has warned the government against the shortage of Liquefied Petroleum Gas (LPG) in the country after the culmination of an agreement between Sui Southern Gas Company (SSGC) and Jamshoro Joint Venture Limited (JJVL).
The association has written a letter to the Secretary Petroleum Secretary Mian Asad Hayauddin, showing concern over the termination of the accord.
We have noted with great concern that production has been shut down at JJVL. Many of our member LPG marketing companies were receiving LPG from JJVL. This will disturb the entire supply chain and create gaps and shortages.
LPG accounts for about 1.2% of the total fuel consumption in Pakistan, and its annual use is approximately 1.06 million metric tons. If the situation persists, it will disturb the entire supply chain and create gaps and shortages, the letter added.
Commenting on the situation, the SSGC spokesperson said:
The agreement between SSGC and JJVL, in pursuance of the Supreme Court decision, was for 18 months only and expired automatically, irrespective of the final determination.
He said that the final determination, under Article 5 ‘Determination Report and Order’, of the agreement is a standalone activity to be conducted by the receivers and supervisors of the project, namely AF Ferguson & Co (AFFCO).
Since JJVL has not provided data to AFFCO, the latter cannot do the final determination, he added.
Data will be provided to AFFCO simultaneously along with JJVL, and SSGC has written to AFFCO in this regard.
He maintained that SSGC has prepared all the documents, worksheets, and other relevant material and will be submitted to AFFCO only when JJVL provides it. Once documentation is completed, it will be put before the Supreme Court for its approval.
For the sake of record and clarity, SSGC never made any commitment to the Supreme Court for an alternative arrangement. However, the court ordered that the termination of MOUs is valid and SSGC is on its own to make its own arrangement.
Meanwhile, the association has requested for a meeting between parties to end this looming crisis, as the JJVL produces 300 to 500 metric tons of LPG regularly.
It mentioned that if the discontinuation persists, the prices of LPG can shoot up by Rs. 10 per kg. Currently, the cost of a domestic LPG cylinder of 11.8 kilograms has gone up by Rs. 120.
Industry sources have also warned about the soaring import bills if the problem is not solved in a timely manner.