LNG issues

We have seen over the past two years a consistent back and forth between the government and the opposition over what the government dismisses as fake news and what the others say are facts. One of the ongoing issues has been the purchase of LNG by Pakistan. It seems that the prime minister has been poorly informed about the realities of energy purchase by his government and may have been provided incorrect data regarding Pakistan's energy purchase.

Most recently, the issue is that of energy purchase. The government claimed that Pakistan is bound to purchase LNG at $13.3 per tonne because this is what was decided by the previous government. Research by Geo's team shows that this is not true. Pakistan is purchasing LNG at 13.3 percent of Brent; 13.3 percent is not the same as $13.3. The rate of purchase was never set at the dollar amount being quoted by advisors to the prime minister. To clarify this situation and to set all records straight, one hopes the ministers concerned come forward and provide the correct position. One question that should be on our minds is that when the prices of LNG and oil fell drastically during the coronavirus pandemic to between two and three dollars, why did Pakistan not join its neighbours like India and Bangladesh in signing long-term agreements for the purchase of this commodity at those rates. Those would have benefited the country for a very long time to come.

We have also been told that energy is purchased at high rates only to meet the six weeks of winter. The reality is that furnace oil has been used to power the energy producing machinery in the country year after year. We should be moving away from this expensive form of energy production and towards the cheaper options available. It also seems that the prime minister has been also told that Pakistan could not purchase cheap oil or cheap liquid natural gas because there was no storage capacity to keep it in the country. This brings up a new issue. In essence all that is needed for LNG is pipelines and the infrastructure to distribute the gas across the country and therefore widen the net of people receiving energy given the growing demand. This is what happens in other countries.

Our failure in this matter raises huge questions. In the midst of all this, at times the previous government is blamed, in other cases the coronavirus becomes the reason and at times even the media is pointed at. None of this will help fix the situation. We need to look at the real figures. It seems quite obvious that somewhere the real picture is blurry, and Pakistan may have been able to obtain energy at far lower rates than the high prices the country is purchasing it at for December this year. These are serious questions which need better answers than the usual litany of accusations.