ISLAMABAD: The Pakistan Tehreek-i-Insaf has again expressed serious concern over what it says the government’s attempt to bypass parliament and enforce an LNG pricing formula through a statutory regulatory order.

Member of the National Assembly Asad Umar, who also heads PTI’s policy-making cell, said in a statement on Wednesday that the “LNG imports will be worth billions of dollars and will affect the economic lives of almost every Pakistani citizen, hence, must be presented before the parliament to ensure transparency and allow the elected representatives of the people to play their role in ensuring that no closed door deals impose inordinate burden on the people of Pakistan”.

Also read: Ogra approves provisional price of $8.64 per unit for RLNG

He said LNG imports remained shrouded in secrecy. “From purchase to storage and re-gasification to transmission to sale, the details of none of these contracts have been disclosed to the parliament,” he said. “If the government has nothing to hide then why are these contracts not being shared with the parliament?”

Mr Umar said amongst the questions that must be answered on the floor of the house included the company from which LNG was being purchased and the beneficial ownership of that company. Simply stating that it was coming from Qatar meant nothing, he added.

“Since the imports are being made without any written contracts how is transparency and cost-effectiveness being ensured?”

He wanted to know the method used to get multiple competitive bids and the results of the bids received.

The LNG policy 2011 states that the ex-flange price shall include the import price and a reasonable rate of return on the investment made in the terminal.

“What steps have been taken to ensure reasonableness of the rate of return? What is the expected rate of return? What is the formula being used to determine the margins for the importing company? What is the benchmark for this formula? How will the returns for the companies distributing LNG through their transmission network be determined?” the PTI lawmaker asked.

He said these companies were monopolies and had large private shareholding so the regulator had to play a proactive role in determining these returns and the parliament had to be allowed to look into the returns being allowed to the entire value chain as it would become the precedent for the entire LNG import business worth billions of dollars a year over many years to come.

Published in Dawn, October 8th , 2015

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