Islamabad: Asad Umar the head of media and policy Pakistan Tehreek-e-Insaaf (PTI) and MNA today stated that it is high time the government came clean on all aspects of the LNG transaction and shared the details with the public.

In a statement, he pointed out that Oil and Gas Regulatory Authority (OGRA) had pointed out seven major legal shortcomings in finalization of sale price of the re-gasified Liquid Natural Gas (LNG).

The first and perhaps most critical aspect was the lack of any formal documentation of LNG purchase price. Considering that LNG worth about 25 million dollars is imported in a single cargo and imports have been going on for several months now, it raises serious questions about the transparency of the purchase transaction and makes it possible for very large amounts of money to be mis-appropriated.

The fact that the LNG is coming from a country where a close associate of the Prime Minister is deemed to be influential makes the issue even more worrisome. The question about the pricing bases of LNG purchase has been raised many times in the national assembly also but no clear answer has been given to date to either the legislators or media or even the regulator.

The second major area of concern with complete lack of transparency is Port Qasim charges to be included in the end consumer price. Neither the agreement with Port Qasim nor the term sheet has been provided to the regulator even. The ludicrous explanation given by the petroleum minister is that commercial contracts cannot be made public.

Directly comparable are agreements with Independent Power Projects (IPP’s) where not only information is made public but also public hearings are conducted to invite public comment. Where the state is guaranteeing returns from tax payers money the state cannot hide behind commercial contract secrecy.

Accusations of rates of return far beyond the established norm for IPP’s have been made and it is about time the govt. disclosed the details of the contract to allow the public to see if the returns are justified or if the accusations of unreasonably high return are infact valid.

Similarly no rational has been provided to OGRA for the retainage quantities allowed for working out the total cost of LNG. The quantity of retainage can have a significant impact on the total cost.

In addition, neither the tri partite agreements between PSO, SSGC and SNGPL have been signed nor the pricing agreements with the final consumer finalized. This is unbelievable level of incompetence where a year after signing an irrevocable terminal services agreement had been signed by the government committing hundreds of millions dollars of tax payers money neither the distribution contracts have been signed nor consumer purchase agreements done. In any well functioning organization heads would have rolled over such incompetence.

PSO which was already reeling under the receivables due to circular debt has been further burdened with Rs. 20 billion due to non finalization of the purchase price for LNG with the end consumer.

This is months after PSO had received a crushing blow to its reputation having defaulted on more than a dozen international letters of credit. An organization which was once a fortune 500 companies and one of the most profitable companies of Pakistan brought to its knees by incompetence and political interference of the political masters of the current government.

Asad said that it is alarming that more than 200 million dollars worth of LNG had been imported and OGRA states that there is no formal approval on record where the Ministry of petroleum and natural resources had authorized such imports.

Asad Umar demanded that all illegal imports of LNG must be suspended forthwith until full disclosures are made about all aspects of the transaction from the purchase of LNG to its sale and all the steps of the value chain in between.

He also demanded that responsibility should be fixed for this incredible level of incompetence and lack of transparency and all those responsible should be given punishment no matter how high a position they held.