KARACHI: The country lost Rs122 billion in last two years due to delayed on spot LNG purchase and production of expensive power through furnace oil, inflicting a colossal sense of foreboding and frustration among the nation. This was stated by Shahzeb Khanzada in his Monday’s episode of ‘Aaj Shahzeb Khanzada Kay Sath.’
Khanzada said due to the failure to contract LNG purchase through futures market, the people not only suffered acute shortages of the heating and cooking fuel in the intense winter, the country on the other hand lost Rs35 billion due to spot purchases of LNG. A further loss of Rs50 billion was inflicted when expensive electricity was produced through furnace oil but the petroleum ministry failed to finalise a timely strategy. Had the LNG being contracted through futures market, none of this would have happened.
According to the programme’s host, the prime minister and the nation was fed on lies by Special Advisor to Prime Minister on Petroleum Nadeem Babar who continued to bluff through skewed technical explanations. The spot prices were explained by the SAPM through Brent slope in percentages and it was claimed that in contrast to PML-N, the LNG is being purchased at 11 per cent discounted rates but now when the gas was purchased at over 20 per cent expensive rates it was justified on the grounds of dollar indexation while comparing that with the PML-N government’s long term LNG contracts, to prove his loyalty that the commodity has still been contracted at “cheaper rates”, said Shahzeb Khanzada.
After the disastrous economic damages inflicted by acquiring the gas through sport contracts from November to February, Khanzada said it was decided that the futures market be explored in the future for advanced purchase at relatively cheaper or sustainable prices. Thereby on Dec 28, gas tenders for April were floated. When the LNG supplier refused to supply the commodity for Feb 23-24, the Ministry of Petroleum announced that they have requested the second and third lower bidders who also refused. The government’s resort to float emergency tender for Feb 21-22, was responded by suppliers offering the merchandise at 24.5-24.8 percent of Brent slope. Whereas for Feb 25-26th, gas bids was received in the range of 16.3-27.7 percent of Brent slope.
The government decided to contract cargo from Qatar at 16.3 per cent slope and once again SAPM Babar twisted facts to say the rates have nothing to do with the futures or spot purchase. If that is so then why following default by Emirates National Oil Company, the government tried to elicit help from the second and third lowest bidder.
Holding on to the same contention why emergency tenders received the highest bids at 40 percent slope (spot rate) after all suppliers had backed out due to delayed tendering for January. The higher demand for winters affects the supply due to bullish market and the national kitty wasted Rs 35bn to acquire LNG at spot rates while the people shivered through the acute winters.
The Ministry of Petroleum not only wasted billions of dollars but continued to unfurl lie after lie. The ministry finally floated tenders for April in December through the futures market. But after the emergency tenders for Feb, justified the spot purchase again. Once again lies and falsification enveloped the entire narrative done by mixing the existing price with that of the PML-N long term contracts, to show LNG purchase being contracted at minimal rates.