The Oil and Gas Regulatory Authority (Ogra) on Thursday revised liquefied petroleum gas (LPG) prices upward by fixing the new rates at Rs 32,723 per ton for the current month. A notification issued here said that the new LPG prices will be effective from May 3.
The LPG prices for April were Rs 30,719 per ton. The differential between April and May prices stood at over Rs 2000 per ton. Ogra worked out dollar-rupee parity by averaging it on the actual open market rates of April at 1:60.71.
The revision in LPG rates is in line with the Economic Co-ordination Committee (ECC) of the Federal Cabinet's decision. ECC had linked LPG prices in Pakistan with Saudi Aramco contract price (CP) in December 2006. Ogra reviews the prices and adjusts them on the basis of fluctuation in Saudi Aramco CP.
ECC assigned the role of monitor and price fixer to Ogra. It was asked to take average dollar-rupee parity for the month and announce the new prices on the third day of each month. Ogra did its job but the new increase in the prices may not suit the distribution companies since summer season is low demand period when LPG consumption recedes considerably.
The LPG importers and distribution companies expect more increase for June as Saudi Aramco CP is showing the rising trend. For June, the increase may be even more but again it will not benefit the importers and distribution companies which will face low demand for next few months. LPG demand increases in winter season and it gives rise to its price as well.
The LPG distribution companies are currently working at nominal profit/margin and the recent increase in prices will further tighten them. The same is almost the case with the importers. High prices will benefit the government which will collect more GST and other taxes on LPG on the basis of the new rates.
Pakistan's LPG production is limited and it depends heavily on import to meet the growing demand. LPG is taken as an alternative source of fuel and its demand is on the rise for industrial use. It is not a fuel for the poor any more.
Comments
Comments are closed.