The price of the Liquefied Petroleum Gas (LPG) has increased as a result of surge in demand with the advent of winter, according to market sources. The supply of LPG is 1,650 tons per day against the demand of 2,600 a day. Market sources add that during the past two weeks LPG prices increased three times with a cumulative impact of Rs 15 per kg translating into an increase of Rs 180 for a domestic cylinder and Rs 720 for a commercial cylinder.
Sources maintained that Saudi Aramco Contract Price (CP) for the next month has increased and local price will rise further within the next few weeks. During past two weeks LPG price in Karachi went to Rs 90 per kg from Rs 75 per kg, in Lahore from Rs 80 per kg to Rs 95 per kg, in Sadiqabad and Rahim Yar Khan from Rs 85 per kg to Rs 100 per kg, in Islamabad, Rawalpindi and Attock from Rs 95 per kg to Rs 110 per kg, while in hilly areas including Azad Kashmir and Gilgit Baltistan it is being sold at Rs 130 per kg.
International LPG price rose by $55 per ton due to surge in demand attributed to winter which led to a rise on the local market. However, the rupee depreciation also impacted on LPG prices, an official of LPG marketing companies told this correspondent. The LPG is only one percent of the national energy mix and major local production is from state owned oil/gas exploration and production companies including Oil and Gas Development Company Limited.
"Our current local production is 1,650 tons a days while demand has touched 2,600 tons a day, which in December may go rise to 3,500 tons a day mark. If this trend continues LPG prices are likely to rise to Rs 200 per kg by late December and January - peak winter months in this country. The government should exempt LPG from 17 percent General Sales Tax (GST) and six percent Advance Income Tax if it wishes to keep LPG prices affordable," the official added.
LPG Distributors Association Chairman Mohammad Irfan Khokhar accused LPG marketing companies of raising the LPG price without any notification by the Oil and Gas Regulatory Authority (Ogra) claiming that the hike was therefore illegal. While flaying the price increase by public sector LPG producers, Khokhar said the rise in price was badly impacting on the poor.
According to Petroleum Ministry's officials, the increase in LPG price could also be attributed to the usage of the commodity in industrial and transportation sector of the country as an alternate to natural gas and CNG. They said previously it was being used as an alternate to pipeline gas for cooking purposes in hilly and rural areas of the country but now thousands of vehicles and hundreds of small industrial units have started to use LPG in the winter, when there is a severe gas shortage.
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