On Monday, Prime Minister Shehbaz Sharif said that the recent power tariff hike would not impact those who consume up to 200 units per month.

He made this statement during a ceremony in Lahore, where Pakistan LNG Limited and the State Oil Company of Azerbaijan Republic (SOCAR) signed a framework agreement for liquefied natural gas (LNG).

The federal cabinet had previously approved the power regulator’s proposal to raise the national average tariff, leading to certain residential consumers facing an additional cost of Rs7.50 per unit.

During the ceremony, the Prime Minister addressed the ongoing debate surrounding the power tariff increase, emphasizing that it was a necessary condition of the agreement with the International Monetary Fund (IMF).

Talking about the LNG deal, the Prime Minister said the deal will be valid for one year with a further option to extend it by another 12 months.

Through this arrangement, the PM said Azerbaijan will offer one LNG cargo per month while it would be up to Pakistan to take it or leave it. “Under the agreement with SOCAR, Pakistan will decide whether it wants to purchase LNG cargo at the offered rate or not. If we don’t purchase it, we will not have to face any financial penalty,” he added.

SOCAR has offered LNG to Pakistan on flexible terms and with a credit line for 30 days following delivery of the cargo under a one-year contract that is extendable by another year under the Framework Agreement.

The agreement is part of Pakistan’s efforts to safeguard energy security, as the cash-strapped nation has been unable to secure viable LNG bids from foreign markets.

This comes over a month after the Economic Coordination Committee (ECC) of the cabinet allowed PLL to execute the proposed framework agreement with SOCAR Trading. At the time, the ECC further directed the Ministry of Petroleum to determine our need for LNG at least three months in advance on a rolling basis.

There is hope that SOCAR will supply cheaper LNG cargo, as well as provide flexible payment terms on credit to PLL.

At a separate event, PM Shehbaz said the government has devised a scheme that will allow private companies to purchase LNG directly from Qatar. The prime minister briefly explained that the current LNG rates are relatively cheap, so the government has come up with this policy which would allow companies to import LNG and use facilities at the Karachi Port as per state regulations.

The companies would not sell the LNG to the market, while rates would be agreed with the government before the gas is delivered to the local industry, he added.

Source: Pro Pakistani