The recent floods have not only caused loss to human lives and infrastructure but the water lost was also worth to irrigate 40 million acre of land. Following excerpt gives the details:

Pakistan lost water worth Rs240 billion due to lack of dams and water reservoirs in the country.

Chairman Fauji Fertilizer Company talking to media men said a quantity of water needed for irrigating 40 million acres land has been wasted. He said Rs6 billion worth of water is required for irrigating 1 million acres land.

According to economic experts, due to absence of political harmony the country not only faced worst ever floods but also failed to store water worth Rs240 billion.

In our last post, we highlighted the lack of control of OGRA over the LPG price dynamics. Now, OGRA has taken notice of the situation and have warned all LPG marketing companies to refrain from overcharging practices and follows the authority fixed prices. This dawn news report gives the details:

Oil and Gas Regulatory Authority on Friday fixed the maximum consumer price for liquefied petroleum at Rs95 per kg and issued stern warning to LPG marketing companies involved in price manipulation.

The authority fixed the maximum reasonable consumer price of locally produced LPG at Rs80 per kg and for imported LPG at Rs95 per kg. It also determined the price for mix of local and imported LPG at Rs82.71 kg.

The prices are applicable for all the urban and rural areas of the country except AJK, Fata and Gilgit-Baltistan where additional Rs30 for an 11.8-kg cylinder may be added to each type of LPG due to higher transportation cost.

Taking advantage of the leniency of the regulator, the LPG marketing companies and LPG distributors are selling the fuel at exorbitant rates up to Rs135 per kg in some parts of the country.

Ogra Executive Director Operations Sarmad Aslam took serious notice of the situation and issued warnings to all the LPG marketing companies to refrain from overcharging and follow the prices fixed by the authority otherwise punitive action would be taken against the manipulators.

He also advised the provincial governments to ensure that no company/distributor be allowed to charge more than the reasonable price determined and fixed by the authority.

Ogra said that strict action would be taken against companies failing to supply LPG at the determined prices which include heavy fines and revocation of their licences.

The authority however maintains that LPG is a de-regulated product and its prices are determined by market forces but under prevailing conditions the authority has intervened to ensure that cartels are not formed for charging a high consumer price of LPG.

Meanwhile, Chairman All Pakistan LPG Distributors Association Abdul Hadi Khan talking to Dawn on Friday said that the current crisis had arisen after PARCO shutdown and supply curtailment from Dhodak gas fields.

However he added that Ogra and the Petroleum Ministry should take action against the cartel of local LPG producers who were minting money from the consumers rather than fixing LPG price.

He alleged that local producers were charging Rs55,000 per ton for LPG which actual costs between Rs8,000 to Rs10,000 per ton.

He further said that due to cartel of local LPG producers, importers were facing serious financial risk.

The unjustified LPG price hike is now in notice of the Ministry of Petroleum and Minerals and they have question OGRA (the regulatory) authority on its failure to control the price in the domestic market. The report from Business Recorder gives the details.

Ministry of Petroleum and Natural Resources has expressed serious reservations over the failure of Oil and Gas Regulatory Authority (Ogra) in playing its due role for controlling LPG prices in the domestic market. Sources revealed to the Business Recorder that the Ministry in a strongly worded letter to Ogra has directed the authority to play its due role and take action against LPG marketing companies that are involved in inflate increase in LPG prices.

According to existing LPG policy, LPG companies are allowed to charge LPG prices that do not exceed the Saudi Aramco Contract Price (CP). “But Ogra has let LPG marketing companies raise the gas price many times during the month of Ramzan,” they said. Petroleum Ministry officials said that delay by Ogra in taking action against LPG marketing companies had raised questions about its role. The role of Ministry of Petroleum is to formulate policies whereas Ogra is a regulator and its responsibility is to ensure a price that does not exceed CP.

When contacted, Executive Director (Operations) Ogra, Sarmad Aslam confirmed that Ogra had received a letter from Ministry of Petroleum and would give its response soon. He said that due to closure of Parco refinery, country was facing LPG shortfall leading to a hike in its price. He maintained that Parco would take around 6-7 days to resume operation. He claimed that Authority had started action against undue hike in LPG prices from the weekend just past.

ECC in its meeting held on December 12, 2007 had decided to allow LPG producers to fix LPG prices on monthly basis by de-linking it with CP and disallowed Ogra to notify LPG prices on monthly basis. Ogra places LPG prices notified by marketing companies on monthly basis on its website. “However, LPG marketing companies allowed to notify prices once in a month, raised LPG prices many times during Ramazan which was against the spirit of the ECC decision”, the sources maintained.

Ogra was also authorised to monitor producer and consumer prices to retain them at reasonable level within the parameters of LPG Policy 2006. It was also decided that LPG producer price should not exceed the CP. Sources said that LPG prices in international market stood at $589 per ton on August 20 but LPG marketing companies were charging a higher price. Government’s flawed de-regulation policy of LPG prices has put the consumers at the mercy of LPG mafia on one hand and wiped out the importers on the other side, sources maintained. Ministry of Petroleum wrote a letter to Ogra after Petroleum Minister Syed Naveed Qamar had taken notice of unjustified hike in LPG prices by LPG marketing companies.

Importers are of the view that after de-linking the price from CP, the supply chain had suffered because of price difference between locally produced and imported LPG. Importers have also alleged that some powerful elements in LPG sector suddenly reduce prices to discourage importers when their shipments are about to reach Karachi causing a difficult situation for them to offload the imported product in the market.

The National Electric Power Regulatory Authority (Nepra) allowed on Tuesday a 26 paisa per unit increase in power tariff for consumers of nine distribution companies of Wapda from August 31 on account of monthly fuel cost adjustment.

A Nepra official told Dawn that power companies had sought an increase of 52 paisa per unit under the fuel adjustment formula for July.

But the power regulator allowed an increase 26 paisa and turned down the rest sought on account of system losses, late payments and overall circular debt.

The official said that Nepra had sent its determination to the federal government for notification. The new tariff will be recovered from consumers in the next billing month. The new tariff will not apply to KESC whose fuel-based tariff adjustment will be made separately.

With the latest increase, the tariff will see a cumulative surge of about Rs1.76 per unit in three months — May, June and July — raising the total per unit cost to about Rs4 per unit.

Last month, Nepra allowed a 64 paisa per unit increase and in June the government separately increased base tariff for all consumers, including KESC, by 7.6 per cent or 50 paisa per unit under an agreement with the IMF. Separately, Nepra increased 52 paisa per unit as monthly fuel cost adjustment for June.

Since March last year the government has increased tariff by about 80 per cent.

via DAWN.COM

The government is facing difficulties in unloading oil consignments from ships because of port congestion and infrastructure limitations, resulting in supply shortages in flood affected areas of Sindh, Khyber Pakhtunkhwa and Northern parts of the country.

Sources in the petroleum ministry told Dawn on Monday that the country’s oil consumption had dropped by about 50 per cent after the recent floods as transport activities had substantially slumped because of damage caused to the road infrastructure.

They said the stocks of petroleum products diesel, furnace oil and petrol were enough for more than 28 days of the country’s usual requirement but transportation problems were resulting in short supplies in many parts of the country, particularly in Sindh and Gilgit-Baltistan.

A senior government official said that because of supply disruptions, there were reports of overcharging and artificial shortage by the private petroleum dealers in many areas where stocks were more than enough for the local consumption.

He said the petroleum ministry issued a directive on Monday to the provincial governments and Oil and Gas Regulatory Authority (Ogra) to take note of the situation and conduct raids on petrol pumps to ensure smooth sales and sufficient stocks of petroleum products.

He said the provincial governments and Ogra had also been asked to seal premises and impose fines on dealers who were engaged in short supplies or overcharging customers.

The sources said at least four ships loaded with furnace oil petrol and diesel were waiting for unloading at the Karachi port.

He said a number of locations along the Indus Highway in Sindh including Shikarpur, Kashmore and Jacobabad could not be supplied with petroleum products because of heavy floods and inundation of roads and other infrastructure facilities.

Likewise, oil supplies in Gilgit-Baltistan and Khyber Pakhtunkhwa were also facing shortages of petroleum products due to heavy damages to roads, bridges and allied transport network. They said the government initially considered to airlift petroleum products in these areas but was now finding it difficult to access such locations even through helicopters.

[via DAWN News]

• Pakistan Telecom companies contribute Rs 238.5m for flood victims: Mobilink, PTCL, Telenor .. http://bit.ly/9RI7Gp #
• Flood disaster in Pakistan is WORSE than the tsunami, 2005 Pakistan earthquake & Haiti earthquake : UN spokesman #

As reported by Stanford News, a new solar energy conversion process discovered by Stanford engineers could revamp solar power production. This
process simultaneously combines the light and heat of solar radiation to generate electricity could offer more than double the efficiency of existing solar cell technology, say the Stanford engineers who discovered it and proved that it works. The process, called “photon enhanced thermionic emission,” or PETE, could reduce the costs of solar energy production enough for it to compete with oil as an energy source.

In our last post on the Synthetic Natural Gas (SNG); we discussed that LPG when mixed with air in right proportion, gives a perfect replacement for Natural Gas. While mentioning, the potential opportunities SNG can provide we said that Industries can use it as an alternate/back-up gas during the Natural Gas (NG) shutdown or curtailments times. In this post we shall discuss the importance of this alternate gas for industries and its need in the coming times.

In Pakistan, NG crisis are no different than energy crisis. Earlier we had NG shutdown hours/days only in winters, now we even have them in summers. With this happening it is easily predicted that in coming times or not thinking of far in the coming winters the NG shortage is going to get worst.

Managing Director Sui Southern Gas Company (SSGC), Dr Faiz Ullah Abbasi, has affirmed this while addressing a recent business gathering. He has said the at the problems regarding the supply of gas in the coming winter would become more serious as compared to the last year, as the demand and supply gap has started to widen.

On the other side the oil and gas sector has also fell victim to the recent floods. The Business Recorder article “Gas loadshedding crisis to further worsen ” gives more details.

The gas load shedding crisis is going to further worsen on account of 375 MMCFD gas suspension from country’s largest Qadirpur gas field because of shutdown of compressors of Sui Northern Gas Pipeline Limited (SNGPL) due to flood. While addressing a press conference, Federal Minister for Petroleum and Natural Resources Syed Naveed Qamar claimed that country had enough stock of fuel oil to meet its requirements.

“All sectors excluding domestic consumers will face more gas load shedding due to suspension of gas supply from Qadirpur gas field in SNGPL system,” Qamar said adding that effort would be made to provide maximum gas supply to power sector to avert power shortage. Minister also ruled out that flood water had entered Qadirpur gas field.

“SNGPL would devise a new gas load shedding plan for all sectors excluding domestic consumers,” Minister maintained.

More: http://www.brecorder.com/index.php?id=1090459&currPageNo=1&query=&search=&term=&supDate=

Such a situation is very alarming for all industrial sectors which are dependent on the NG supply. The shutdown will greatly affect their production process, making it slow or even reducing their full production capacity.

As SNG can be used interchangeably with NG it makes a powerful tool to strategically manage winter Natural Gas shortage or NG load shedding. The industrial sector must seriously consider opting for SNG as their can be no other permanent alternative source/back-up to natural gas.

When we have clear trade embargoes for no trade with Israel. This comes as an astonishment that how can the state oil company PSO go about a deal with an Israel based company. The excerpt from Dawn has more detail:

The Pakistan State Oil, a government-run oil company, has awarded a contact to an Israeli-based firm, Turpak-Orpak, despite the government’s ban on any kind of trade or agreement with an Israeli entity.

The matter was taken up by the Senate Standing Committee on Interior at its meeting on Monday.

The committee did not only deal with the matter of awarding a contract to any Israeli firm but also expressed doubts over the operation of the company close to sensitive installations in the country.

“It is an Israeli military establishment-funded company which is being headed by a military general,” committee’s Chairman Senator Talha Mehmood told Dawn.

“We have learnt that the company had installed its equipment close to sensitive installations and, therefore, I have ordered an inspection of the equipment to ascertain whether they are being used for monitoring purpose,” the senator said.

Mr Talha said that under SRO 76 (1) issued on Sept 2009, no Israeli company could operate in the country, but the PSO management awarded the contract to the firm in 2008.

PSO officials who attended the meeting said the contract had been awarded by the previous management and they had nothing to do with it.

Read more: http://www.dawn.com/wps/wcm/connect/dawn-content-library/dawn/the-newspaper/front-page/19-pso-grants-contract-to-israeli-firm-080-hh-10

Ogra again increased the price of compressed natural gas (CNG) by Rs 1.75 in the country and is forcing stations to sell gas on higher rates of Rs 57.03 against Rs 55.30.

Ogra has fixed the selling price of CNG for the Potohar Region, Khyber-Pakhtukhawa and Balochistan at Rs 57.03 against Rs 55.30 and for Sindh and the central Punjab Rs 55.30 against Rs 53.03.

Ogra on Sunday issued a notification on revised retail prices of compressed natural gas (CNG) in the country. On the other hand, the All Pakistan CNG Association has rejected the revised retail price of gas and decided to beseige the Ogra headquarters in protest on August 4.

The official spokesman of Oil and Gas Regulatory Authority (Ogra), Asad Latif, told The News that the concerned authority had issued a notification of the new revised retail price of CNG across the country. All stations would follow the rates of gas according to the notification, he said. He said that overall, Ogra had increased the rates by Rs 1.75 per kilogram throughout the country.

CNG Association Chairman Ghayas Abdullah Piracha said, “We have rejected the revised rates of gas by Ogra. The government wants to destroy the industry by increasing the rates of gas again and again. We have decided to besiege the Ogra headquarters on August 4 against the increase in gas rates, he said and added that several stations in the country were following the old rates of gas.

“The government wants to bring the rates of gas and diesel at par for destroying the CNG industry in the country. We want the government to decrease the rates of gas in order to decrease the rates of CNG to provide relief to consumers,” he said.

He warned the government of closing down all stations throughout the country if the authorities concerned did not take back the notification on price revision. CNG station owners told The News that Ogra had forced them to sell the gas according to the revised rates on Sunday.

[via The News]