While exhibiting free market mechanism after de-linking from CP based formula of Saudi Arabia the producers have entered into a price war. In response to big increase of Rs 6584 plus by Parco, the Jamshoro Joint Venture Limited (JJVL), Pakistan's single largest LPG producer, cut down its rates by 10 percent from December 6.
Announcing the reduction in prices, JJVL said it appreciated government's decision to de-link local LPG prices from Saudi Arabian export prices. It said: "As part of our commitment towards ensuring availability of affordable LPG throughout Pakistan, JJVL has, with effect from December 6, reduced its LPG base-stock price by 10 percent, or by Rs 3,887.26 per ton from Rs 39,809 per ton to Rs 35,921.74 per ton. JJVL urges other LPG producers to follow suit, and reduce prices in the interest of the end-consumers.
"The new LPG base-stock price of Rs 35,921.74 will allow for lower end-consumer prices. We have directed our customer companies to ensure that the retail price of LPG does not rise above Rs 650/11 kg, or Rs 55/kg, so that the benefit of this price reduction is passed on to the end-consumer visibly, palpably and immediately." It added: "We shall continue to work with all stakeholders in the LPG industry in the same spirit".
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JJVL Base-stock Price (Rs/MT) 35,922
Total Ex-JJVL Price (Rs/MT) 41,408
Total Ex-JJVL Price (Rs/11.8kg) 487
Maximum Consumer Price (Rs/11.8kg) 650
Maximum Consumer Price (Rs/kg) 55
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JJVL appreciated President Pervez Musharraf and caretaker Prime Minister Mohammadmian Soomro for their bold decision to deregulate the LPG pricing mechanism and de-linking local LPG prices from the Saudi Aramco CP.
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