The Oil and Gas Regulatory Authority (OGRA) has increased the official price of liquefied petroleum gas (LPG) for November to Rs294,075 per tonne, up from Rs279,341 in October. In the open market, however, LPG is selling at nearly twice the official rate amid a shortage linked to the US-Iran war.
Under the notification issued on Saturday, the official price of an 11.8 kg domestic cylinder rose by Rs173 to Rs3,470. The official rate is Rs294 per kg.
OGRA said the producer price is linked to Saudi Aramco-CP and the US dollar exchange rate. Compared with the previous month, Saudi Aramco-CP rose 6.47 per cent, while the average dollar rate fell 0.12 per cent. The changes raised the consumer price by Rs14.73 per kg.
In the open market, LPG is being sold at up to Rs630 per kg. Company-operated franchises are charging up to Rs400 per kg.
LPG Distributors Association of Pakistan Chairman Irfan Khokhar said the situation is serious because of the closure of the Iran border. He said at least 70 per cent of LPG is imported from Iran, while 30 per cent is produced locally. He called on the government to make serious efforts to control market manipulation.
Meanwhile, LPG marketing companies have threatened to shut down operations from Nov 16 if the private sector is sidelined in the upcoming LPG policy. Pakistan LPG Marketers Association Chairman Ali Haider said the association will strike if the government implements the policy. He said the government should not reverse the deregulation of LPG, and attributed the shortage to the Iran border closure.
Mr Haider said only about 225,000 tonnes of the country’s roughly 1.3 million tonnes are imported from the Gulf, mainly by the private sector. He said the ProGas terminal at Port Qasim, which is under the control of Sui Southern Gas Company, last imported LPG about seven months ago.
The association has written to Petroleum Minister Ali Pervaiz Malik, stating that the draft policy sent to the prime minister contained no input from the private sector. It has called for complete deregulation of the LPG sector.
The association said the 2016 LPG policy imposed a petroleum development levy of Rs4,669 per tonne on locally produced LPG, to fund subsidies for state-owned entities such as PSO, Parco and SSGC to import LPG in winter and during emergencies. Mr Haider alleged that, despite billions of rupees collected through the levy, these entities have failed to import LPG during the current shortage.
