ISLAMABAD - Petroleum Minister Musadik Malik on Monday confirmed that Pakistan is preparing to formally approach the US administration for seeking waiver of sanctions on the Pakistan-Iran gas pipeline project.
“We will seek exemptions from American sanctions as the Pakistan-Iran gas project cannot bear the burden of embargo sanctions,” said Petroleum Minister Musadik Malik in unofficial talks with the media here.
“We will present Pakistan’s case comprehensively and will try to seek exemptions by presenting political and technical reasons against American sanctions,” Malik said.
The government will also engage in extensive lobbying to obtain the waiver, he added.
The minister hoped that construction of the project would commence soon.
It is noteworthy that the interim government had earlier approved the construction of an 80-kilometer pipeline on Pakistani soil. However, the plan to file the request for exemption from American sanctions was delayed by the caretakers due to evolving geopolitical circumstances. Decisions regarding the Pakistan-Iran gas pipeline project were made by the ministerial oversight committee. A final draft requesting exemption from American sanctions has been prepared by the then government.
On the question regarding the proposed hike in natural gas prices by the Sui Companies, Musadik said that we have concerns over increase in gas prices. Whether the dollar price decreases or increases, requests for price hikes come from companies, he added.
Malik further said that only 25 to 27 percent of urban areas have access to pipe gas facilities. More than seventy percent of the population does not have any access to this facility. The gas price hike affects only 25 to 27 percent of the population, he claimed.
However, he said that 99 percent of the population is connected to the electricity system. Supplying cheap electricity is the solution to the problem, the minister added.
The generation cost of the LNG plants between Rs22 to Rs26 per unit, while generating electricity from local gas reduces the cost to Rs10 to Rs12 per unit. To conserve gas, we have to provide cheap electricity to the people, the minister said.
Musadik Malik said that import of oil is being carried out through private channels from Russia. The captive power plants are being discouraged, he added.
To a query about the implementation of sales tax on petroleum products, he said “I am not aware of the implementation of sales tax on petroleum products.”
He said that six LNG power plants are extremely efficient. These plants can be operated on imported gas to produce cheap electricity. The minister said that the circular debt in the energy sector has reached to Rs5 trillion. Reforms will be needed to tackle the menace of circular debt, he said.
