ISLAMABAD, Dec 30: In a bid to meet growing energy shortages, the government has allowed a group of five independent power producers (IPPs) in Punjab to import liquefied natural gas (LNG) using the transmission network of state-run gas companies.

Speaking at a news conference on Thursday, Petroleum Secretary Imtiaz Kazi indicated that tenders would again be invited for a much-delayed project for importing 3.5 million tons of LNG annually from Qatar for 25 years. He also hinted at an increase in petroleum prices of up to nine per cent.

The secretary said that IPPs led by the Saphire Group had requested permission to allow import of LNG for power generation through the government's network.

“We have allowed them to import LNG according to their requirements and they will be entitled to use our network for its transportation.”

He said the IPPs would be charged for using the gas companies' network, but the rate and import prices remained to be finalised. The government would have to provide guarantees for the import in the private sector.

He said the Economic Coordination Committee (ECC) of the cabinet had been requested to take a decision on the Mashaal LNG project because a lot of time had been lost due to litigation and procedural problems.

He said the government had made significant progress on LNG import but litigation had delayed the project.

He said the petroleum ministry was taking the project to the ECC again with the options of starting the re-tendering process or allowing award of the contract to the pre-qualified lowest bidder, because the project had already been delayed for quite some time.

“Whatever option the ECC approves, the ministry will move on a fast-track basis to implement it.”

Answering a question, Mr Kazi said the ministry had strengthened its legal position and the government would not face any problem if the re-tendering process was challenged in court.

He said it was difficult to predict LNG prices in the international market but these were expected to remain in the same range because of a lower demand in the US.

The government is also pursuing the Turkmenistan-Afghanistan-Pakistan-India and the Iran-Pakistan pipelines to meet energy shortages.

According to figures compiled by the petroleum ministry, the international prices of motor spirit have increased by 9.2 per cent, kerosene by 5.2 per cent, high speed diesel by 5.8 per cent and furnace oil by 3.1 per cent.

Mr Kazi said the Oil and Gas Regulatory Authority was yet to share with the government its calculations for increasing the oil prices in the country.

He said no government would like to increase prices to an extent that problems were created for the people, but it was rational to pass on the impact of changes in the international rates.

He argued that the government collected about Rs250 billion in taxes on petroleum products and if it provided subsidy, the revenue would be lost, forcing it to resort to printing currency notes, which would have a greater inflationary impact.

Talking about gas load management, he said hundreds of thousands of new connections were given every year, while the supply was not increasing.

He said the current gas shortage was about 600 million cubic feet per day and it could increase to 900MMcfd in the coming days.

The secretary said the government was putting in the maximum possible effort in exploitation of domestic energy resources.