ISLAMABAD: The Oil and Gas Development Company (OGDCL) has started Liquefied Petroleum Gas (LPG) production from Kunnar Pasaki gas field, as 120 ton is being produced per day, which will go up to 350 tons per day within a year. According to ODGCL officials, Kunnar Pasaki gas field has the potential to produce 350 ton LPG and 286 Million Cubic Feet gas per day (MMCFD). The field has become partially operational with production of 100 MMCFD gas.
The production from the Kunnar Pasaki would help reduce Pakistan's dependency on imported LPG. Since 2006 local LPG production has declined from 1,800 ton to 1,100 tons per day, due to below capacity functioning of refiners, which has hard hit by the circular debt. Resultantly, LPG has become the most expensive fuel in the country, which is currently being sold at Rs 160-190 per kg across the country.
The LPG marketing companies and distributors have congratulated OGDCL on commencing production of 120 MT of LPG per day from its Kunnar Pasaki Field. Spokesperson LPG marketing companies Belal Jabbar said that it was the first significant LPG production in the past seven years, which, he said, is a great achievement.
"Faced with a lackluster demand due to uncompetitive high prices, marketing companies have started to scale down their sale rates. Demand pattern is also shifting with change in weather and resumption of gas supplies to industries and household consumers," Belal added.
He said that local LPG production, which was previously meeting 80 percent of the total need, would now cater up to 90 percent demand. "There have been zero imports so far this month and we, therefore, request the Federal Government to seriously reconsider withdrawing the Petroleum Levy," he demanded.
The additional LPG will add 12 percent, boosting local production, which has been on the decline. The new production will replace costlier imports resultantly saving precious foreign exchange. LPG prices hit a record high earlier this month due to the imposition of Petroleum Levy and an all time high Saudi Aramco Contract price with which local prices are indexed. The Petroleum Levy was enforced to equate the price of local production with imports in a bid to improve supplies of the latter.
Belal denied that the reduction in price had anything to do with a strike call given by one main LPG distributor association. The timing of the additional production is expected to create further pressure on prices and LPG producers are likely to reduce prices in the coming days.
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