THE import of LPG is being glorified by Minister of Petroleum and Natural Resources Dr Asim Hussain as the next best thing after the invention of bread.

To fulfil the dream an LPG import terminal was bought through a court auction by a Public Utility Company at a cost of Rs2.8 billion. A levy of around Rs11,000/MT was also imposed on locally produced LPG so as to facilitate the sale of imported LPG. About six ships carrying around 24,000 tons (valued at about $35 million) of LPG cargo were brought in a hurry. However, before the imported LPG can hit the market, the Lahore High Court set aside LPG levy making the imported LPG unattractive compared to the locally produced LPG.

To dispose of imported LPG, the minister has devised a new plan to sell it to villages at subsidised prices. Of course, the subsidy would be paid from the national exchequer. In order to justify subsidy, he has taken the plea of gas shortage. How else can he dispose of the bad investment in imported LPG?

The financial burden of the subsidy in distributing imported LPG to 50,000 to100,000 consumers in villages built on SSGC and SNGPL system and consuming 2.5 MCF per month or on an average three LPG cylinders, 11kg each, work out to be Rs7 billion annually.

On top of this, there will be administrative and distribution costs of Rs1bn plus one-time fixed cost of cylinders say Rs150 million, besides administrative misappropriations.

All this is being done only to take care of 5,000 tons of imported LPG a month. The best part is that as a result of the above hassle and exorbitant cost to the exchequer, there will be only a paltry saving of 12.5 mmcf a day of natural gas.

In my opinion if there is a will, a little effort of two gas utility companies can conveniently reduce gas losses and save the country from importing LPG and the heavy subsidy associated with it.

AMIR KHAN KHATTAK Peshawar