ISLAMABAD, Aug 21: Officials within the government are raising questions over the shift in policy from bilateral discussions on Iran-to-Pakistan gas pipeline to appointment of an independent consultant to determine the price of imported gas.
The officials said they had taken up the matter with the president and the Ministry of Foreign Affairs because they felt that “a price to be calculated by an independent consultant on the basis of international gas market would not be feasible for Pakistan’s economy”.
They said it was equally imprudent to leave the question of gas pricing to the heads of state, instead of negotiation at the official level, because it would mean that gas pricing was to be finalised on political grounds, instead of its economic considerations. “The maximum the two presidents (of Iran and Pakistan) could do was to engage their officials for price discussions,” they said.
They said it was strange to note that the price of gas, which should have been central to discussions had been kept at the fag end of the process, and Iran, India and Pakistan were moving quickly on procedural issues like framework agreement, security, delivery points for gas and pipeline specifications.
“What would you do with these agreements if the price of the product is not agreed to or is found to be economically unviable for Pakistan,” questioned an official who remained actively involved in negotiations with Turkmenistan, Qatar and Iran, besides a number of other parties interested in these projects.
He said Pakistan had finalised a gas price of $1.65 per MMBTU with an upper limit of $2.05 per MMBTU with Turkmenistan in late 1990s.
Mr Qasimpur, special envoy to the then Iranian president, had met former foreign minister Sartaj Aziz to discuss the gas price but had been referred to the petroleum ministry for price negotiations.
In his talks with petroleum ministry officials, Mr Qasimpur had offered a gas price of $2.05 per MMBTU but further progress on the pipeline projects had slowed down in the initial years of the current government because of some discoveries at home.
Now, Iran has demanded a price of $7.2 per MMBTU.
Pakistan and India agreed with Iran early this month in New Delhi to appoint an independent consultant to work out gas price in the light of international standards, which if seen in the context of Europe or Japan market would be unbearable for Pakistan, the official said.
The official said while India might accept even $7 per MMBTU because it was importing LNG at price close to this tariff and was making efforts to either transport its share in the Sakhalin gas field in Russia through ships or swap this with Russian Gazprom for Iranian gas delivery to New Delhi, this would place Islamabad in a difficult situation.
The Foreign Office, too, did not feel comfortable with the impression that “Pakistan and India are united against Iran” over gas price, said another government official, who wished not to be named.
Officials said the planning commission was also contemplating to move a note to the prime minister and the president to put in place a system of inter-ministerial discussions on major energy projects, including gas import plans, before international negotiations to protect Pakistan’s interests.
India, Iran and Pakistan agreed early this month in New Delhi to appoint a consultant to try to resolve a row over the price of gas. After two days of negotiations, Iran stuck to its demand for a price of $7.2 per MMBTU with three per cent annual increase, while the buyers sought a price band with a floor and ceiling.
Petroleum secretary Ahmad Waqar, who was accompanied by the adviser to the prime minister on energy, Mukhtar Ahmad, had said in New Delhi that Pakistan and India were united on the cost issue and were looking at a price affordable and reasonable to their domestic markets.
