The prices of Liquefied Petroleum Gas (LPG) have registered an unprecedented increase since 2005, as it was available at Rs 17,000 per ton, which is now being sold at Rs 106,000 per ton. As per official figures, local LPG production in Pakistan stands at 1,200 tons per day, while Pakistan imports 3,000 tons of LPG per month.
In 2005 per 11.8-kg domestic cylinder of LPG was being sold to consumers at Rs 450 or at Rs 38 per kg, which is now being sold at Rs 1450 and Rs 150, respectively. According to official figures, 6.3 million households out of 25 million are connected with the systems of Sui Northern Gas Pipelines Limited (SNGPL) and Sui Southern Gas Company (SSGC) and they are using natural gas as fuel. While the rest of the population is relying on firewood, LPG, diesel, coal and other sources fuel.
The LPG distributors accuse the marketing companies of taking full advantage of the situation as they are selling local LPG at international price in the absence of any monitoring by the Oil and Gas Regulatory Authority (Ogra). He said in Pakistan only 13 marketing companies out of 86 possessed the licenses to sell imported LPG, but all of them are charging the consumers rates of imported LPG.
Ogra announces the consumer prices of LPG every month, but in the market hardly anyone is selling it on Ogra-prescribed rates, he added. In Rawalpindi/Islamabad LPG is being sold at Rs 150 per kg instead of Ogra-fixed price of Rs 114 per kg for locally produced LPG, Rs 126 per kg imported LPG or Rs 123 per kg for mixed LPG.
In the first week of August Ogra increased LPG price by Rs 108 per domestic cylinder of 11.8 kg or Rs 9 per kg. For the month of August, Ogra had fixed locally produced LPG price at Rs 1348 per domestic cylinder of 11.8 kgs or Rs 114 per kg, imported LPG price was fixed at Rs 1487 per domestic cylinder of 11.8 kgs or Rs 126 per kg and the price of local and imported mixed LPG fixed at Rs 1376 per domestic cylinder of 11.8 kgs or Rs 117 per kg.
The authority has allowed the marketing companies to charge additional Rs 30 per domestic cylinder of 11.8 kg in Gilgit-Baltistan and Azad Jammu and Kashmir due to higher transportation cost. According to All Pakistan LPG Distributors, in August LPG price in international market increased by $27 per ton, which in July was being sold at $843 and in August it touched $870 per ton. LPG distributors said that now LPG price has reached $1,200 per ton and consequently Ogra will further jack up LPG price as LPG prices are linked with international prices.
Currently, local producers like JJVL and Parco have increased the LPG price from Rs 83,000 per ton to Rs 86,516 per ton. While the government-run Oil and Gas Development Company Limited (OGDCL) is supplying LPG at Rs 86,567 per ton. The authority had fixed locally produced LPG prices at Rs 105 per kg on July 12, it also fixed imported LPG price at Rs 123 per kg. Ogra fixed price of imported LPG at Rs 1450 per domestic cylinder of 11.8 kg, while it fixed locally produced LPG domestic gas cylinder price at Rs 1,239.
Muhammad Irfan Khokar, Chairman LPG Distributors Association Pakistan said that due to ineffective LPG policy of the government prices are increased. He said that Ogra has failed to let the LPG marketing companies follow the rules and regulations.
The authority needs to take action against LPG marketing companies, which according to Irfan Khokar have created cartel and are selling LPG at will. He also alleged that the LPG marketing companies are not issuing invoices/gate passes to distributors. Pakistan''s current domestic LPG production stands at 1,200 ton per day, which has reduced from 1,600 tons per day in 2006.
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