Home / Interviews / Oil price regulations need modification; Present indigenous lignite coal highly productive for the country

Oil price regulations need modification; Present indigenous lignite coal highly productive for the country

Interview with Mr Abdul Sami Khan – Chairman, Pakistan Petroleum Dealers Association and Chairman CNG Dealers Association


Mr Abdul Sami Khan (Alig), Sitara-e-Imtiaz, was born in India and belongs to the Kakar tribe. He completed his education from Aligarh Muslim University. His family migrated to Pakistan. His father, Mr Abdul Waheed Khan, started Terry Towel factory business and he also joined him in the business. Then he stepped into the petrol business and since then he has been very active in it. His designations are as follows: – Chairman, Pakistan Petroleum Dealers Association – Chairman, CNG Dealers Association – Chairman, FPCCI Standing Committee on Petroleum Products – Vice Chairman, FPCCI Standing Committee on Banking Credit & Finance – President, Clifton Block 2, Residents Association – Ex MPA, Sindh – Ex Vice President, Chamber of Commerce & Industry, Karachi – Ex Member, Board of Governors, Civil Hospital and Lyari Hospital – Ex Administrator, P.E.C.H.S – Ex Hon. Treasurer, Karachi Gymkhana

ABDUL SAMI KHAN: There was a time when OPEC used to dictate oil prices and managed to kill competition through their monopolistic approach. However, emergence of shale gas and significant enhancement in technology primarily from the US enabled expansion and production of shale gas/oil at multiple locations across the globe.

This self-sustainable approach led to oversupply of gas and therefore the prices to slow down. Investments towards research (shale and technology) into finding more efficient and cost effective ways of exploring oil will result in over production and as a result OPEC would be losing its bargaining power. Moreover, the increasing awareness of renewable technology will also have an impact on the demand of oil. Price of oil if not reduced can only be maintained at the current state in the near future.

ABDUL SAMI KHAN: Long term oil prices in Pakistan are usually in line with the international prices, however, in the short term the changes seem to be politically driven. Moreover, government imposes various taxes such as CESS on the consumers, which are debatable. The regulations and calculations of the taxes can only be justified through accountability and transparency. The consumers or the petrol pump dealers are not taken into confidence hence the price regulations of Pakistan seems higher to the end user compared to the international market.


ABDUL SAMI KHAN: Pakistan is one of the most energy resource abundant countries in the world. It can generate electricity through almost all its resources if utilized and also produce resources for industrial, transport and domestic use. I am a big advocate for having a good energy mix in the country and support the use of indigenous lignite coal in Pakistan, which can produce 5000MW for 50 years.
Moreover, Pakistan should start attracting foreign exploration countries to explore and extract gas and oil in Balochistan, which has untapped natural resources. LNG and coal terminals in Pakistan are not a long term solution and that investment should be channeled towards enhancing or utilizing our indigenous resources.

ABDUL SAMI KHAN: Renewable is also an indigenous resource and will have a huge part to play in having a good energy mix. Pakistan has huge potentials in solar, wind and hydro primarily. There are too many precedents around the world for solar that Pakistan can learn from.

Germany has an incentive plan for household, where the government buys access solar power from them at a higher rate if they generate their own electricity.

South of Pakistan is considered a great source for solar energy. Although hydro power plants have higher gestation periods they generate the best economic value in the future. Pakistan has a great potential of small hydro in north of Pakistan and can utilize it for meeting agricultural electricity demand.

Although wind power has already started reaching a mature state but an introduction of smart grid system can help stabilize the grid and therefore increase wind capacity. Government should invest more time in the future technologies to be ahead in the renewable sector. Europe has already started funding in the tidal technology (underwater sea waves to be utilized to generate electricity.

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