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Two LPG vessels turned away, shortage feared

ISLAMABAD: Distributors of liquefied petroleum gas (LPG) have voiced fears that consumers could go short of LPG during Ramazan following refusal of SSGC LPG Limited, a subsidiary of Sui Southern Gas Company (SSGC) that deals with importers, to handle two gas-carrying vessels.

Speaking at a press conference on Thursday, FPCCI’s LPG Standing Committee Regional Chairman Irfan Khokhar alleged that state-owned terminal operator SSGC LPG had refused to entertain two vessels within a week which were carrying 11,900 tons of imported LPG.

LPG prices reduced by Rs5 per kg

The ships were turned away after an importer filed a case against the terminal company in a court.

“This caused a cumulative loss of Rs40 million to the national exchequer as the terminal charged $32 per ton for handling gas imports,” he said. A representative of the SSGC terminal company was contacted for comments on the development, but he did not respond.

Normally, the LPG demand is in the range of 3,000 to 3,500 tons per day, but it jumps to 7,000 tons in Ramazan. LPG is mostly consumed in rickshaws, buses, other vehicles and remote areas where piped gas is not supplied.

Khokhar chastised what he called bureaucratic tactics, fearing hurdles in the way of imports would cause LPG shortage and push prices up.

He acknowledged that the government had made efforts to increase LPG supply through imports, but a conspiracy was being hatched to create artificial shortage.

One LPG importer had already switched to a private terminal while another importer had been blacklisted after he filed a case for the recovery of his LPG stock kept with the terminal on account of security deposit, he said.

Khokhar believed that the terminal company bought by SSGC was a dead one, but importers played a key role in riving the company by bringing in LPG cargoes.

Giving a comparison, he pointed out that the terminal being run by Engro, a private-sector company, had handled a total volume of 1.2 million tons, of which it handled 226,000 tons in 2016 by operating for 14 days.

LPG becomes expensive as imports slow down

On the other hand, the SSGC subsidiary handled 214,000 tons in a month, though both terminals had the same storage capacity.

Last year, 1.2 million tons of LPG was sold in Pakistan market, of which 0.53 million tons were imported whereas the rest was produced by domestic companies.

Khokhar claimed that he had exposed theft of 2,000 tons of LPG worth Rs147 million and in that connection held a meeting with company high-ups. SSGC managing director, who chaired the meeting, gave assurances that he would take action, but nothing had been done so far, he said.

Published in The Express Tribune, May 19th, 2017.

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