Chairman of Standing Committee on Petroleum Senator Mohsin Aziz Monday called for an immediate hearing to facilitate the restart of local LPG production at the facility of Jamshoro Joint Venture Limited (JJVL).
The senator stated this after a meeting with Irfan Khokhar, Chairman of the LPG Distributors Association. “Senator Aziz has heard the voices of the LPG industry and has committed to removing obstacles in the way of restarting the JJVL plant and bringing 9,000 tons of local production back online in the Pakistani market,” said Khokhar. “We are grateful to Senator Aziz for taking notice of this matter and convening a hearing to resolve the matter to protect the interest of consumers and to protect the national interest.”
The SSGC stopped gas supplies for LPG production to JJVL on June 21. After the shutdown of local LPG production, SSGC, through its wholly owned LPG import subsidiary, advertised a tender to import 2,500 tons of LPG per month.
Earlier on Monday, Khokhar led a joint national delegation of LPG distributors and LPG marketing companies to meet Nadeem Babar, Special Assistant to the Prime Minister on Energy (Petroleum Division). During this meeting, SAPM Babar reassured the industry that gas supplies to JJVL shall be restored in the near future.
“We also welcome the positive remarks of the SAPM and Petroleum Division to focus on increasing local LPG production and restarting JJVL,” said Khokhar. “The SSGC decision to stop gas supplies to JJVL was highly controversial and has created unnecessary price volatility.”
“JJVL has been providing energy to 750,000 homes across the country through a robust infrastructure in which LPG marketing companies and distributors have invested intensively,” said Farooq Iftikhar, Chairman of the LPG marketing companies’ association, who also attended the meeting with the SAPM. “It is deeply regrettable that SSGC has spurned these investments and the interests of consumers by closing down its highly profitable contract with JJVL for reasons that are untenable at best.”
The JJVL has been producing LPG and NGL since 2005 and has provided Rs. 85 billion in revenues to the state-owned utility without any investment of the part of SSGC. Gas supplies were disrupted in 2018 until JJVL and SSGC reached an agreement approved by the Supreme Court of Pakistan in December of that year. Gas supplies were again stopped on June 21, 2020, after SSGC’s board controversially decided not to extend the contract with JJVL and rely instead of importing LPG through its own subsidiary company.
“The SSGC decision shows conflict of interest and subverts the national interest,” said Khokhar. “The people behind this decision who have caused a whole month of losses to SSGC and created uncertainty in the market must be taken to task and held accountable.” He added that the Managing Director of SSGC and its chief legal officer have both become controversial after various scandals have emerged in the press and should resign or be removed.
