Is the gas pricing mechanism given in Petroleum Policy 2001 really incorrect?
For some of the people answer is ‘yes’ whereas rest of them believe that the gas pricing formula given in the policy is ‘wrongly worded’. The level of confusion among stakeholders might be different but there is a general agreement that gas pricing formula certainly contains technical flaws. Petroleum (Exploration & Production) Policy 2001 was announced somewhere in May 2001 by the Ministry of Petroleum & Natural Resources (MPNR), Government of Pakistan with an objective to create an investor friendly climate and attract exploration investment in the country. Besides offering certain fiscal incentives the Policy was specifically formulated to give a clear gas pricing mechanism to the E&P companies to achieve this objective. Because of the fact that the gas pricing mechanism given in the previous Petroleum Policy announced in 1997 contained an omission, the MPNR wanted to overcome that issue by revising the gas pricing framework of the all Petroleum Concession Agreements (PCAs) signed u
