Break-up monopoly of SNGPL, SSGC & separate distribution from transmission, says: Iqbal Z. Ahmed

When JJVL commenced operations, there was a monopoly of around six companies at that time and now 130 entities existed, crediting itself for the efforts of bringing distribution down to the district level, said Iqbal Z. Ahmed

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LAHORE: Business tycoon Iqbal Z. Ahmed has called for the separation of transmission and distribution from gas supply companies and setting up small entities for every city which will distribute gas to consumers.

In an interview with Business Recorder, Iqbal Z. Ahmed who is the co-founder and head of Associated Group (AG) which includes companies like Mehran LPG, Lub Gas, Pakistan Gasport Consortium Limited (PGPC) and Jamshoro Joint Venture Limited (JJVL) said the company has been in the energy sector since 1989.

Mr Ahmed said the company commenced operations with a small LPG venture in 1989 and said in his experience the country’s energy sector was a touch stunted because innovation and efficiency weren’t rewarded.

Talking about the JJVL project and the problems it encountered, Mr Ahmed said the entire dynamics of the LPG sector in Pakistan were changed since it entered.

He said when JJVL started operations, there was a monopoly of around six companies at that time and now 130 entities existed, crediting itself for the efforts of bringing distribution down to the district level.

When queried about LPG sale and production currently, Mr Ahmed said it stood around 1,800 tons per day, whilst consumption was 3,000 tons. The deficit is being via imports, said the AG chairman.

He highlighted LPG was a fuel of necessity not of choice since it was utilized in areas where natural gas supplies weren’t available, and the latter had an advantage of being better priced.

His views on gas pricing being a thorny issue were sought, to which he responded that prices of natural gas, LPG and LNG should be in the same basket and then selective subsidies could be awarded to deserving consumers.

The natural gas prices presently were three times lesser than what customer are paying for LPG, said Ahmed.

Mr Ahmed alleged when someone tries to do something innovative, the person gets accused of pushing the envelopes and something is wrong with it.

He termed it as “thievery” to work in the current framework, where line losses stood at 15 percent.

The AG Chairman cited the example of state-owned distribution gas companies Sui Northern Gas Pipelines (SNGPL) and Sui Southern Gas Company (SSGC) and irrespective of how good their management was, the system was rigged against good governance.

He called for breaking up the monopoly of SNGPL and SSGC and suggested separation of distribution from transmission.

Mr Ahmed added the distribution of gas supply should be provided by small companies with every city having its own distribution company.

When queried about his experience of the PGPL RLNG terminal established in December last year, Mr Ahmed told once the terminal starts running, the problems go away.

He disclosed that he was working on establishing a second LNG terminal in Pakistan with the assistance of the private sector.

The terminal is going to be established in a joint venture with his foreign partners, said Mr Ahmed.

Stipulating three conditions for the establishment in tandem with his foreign partners, Mr Ahmed said he won’t obtain any funding from Pakistan, secondly, they would own import their own LNG on B2B take-and buy deals which is allowed under the policy.

Lastly, he proclaimed the company would bring the best technology to RLNG in Pakistan.