Pakistan's LPG producer prices are expected to increase by 10 percent on Thursday as a result of the increase in the Saudi Aramco Contract Price, LPG producer Fasih Ahmad said this here on Wednesday. "The month-on-month Saudi LPG export price or Saudi Aramco Contract Price has increased by $66 per metric tonne from $660 per metric tonne in November to $726 per metric tonne for the current month," said LPGAP's spokesman.
"Local LPG producer prices have continued to remain linked with Saudi export prices since January 2007". Under the LPG producer pricing policy, local LPG producer prices cannot exceed the current month's Saudi export price, which remains fixed for one month and which has increased every month since August. Local LPG producers are expected to notify an increase in prices on Thursday of up to Rs 6,545 per metric tonne or Rs 77 per 11.8kg cylinder or Rs 6.53 per kilogramme. This increase will affect prices across the value chain.
"The recent increase in the price of diesel will also impact the viability of LPG marketing companies and their LPG distributors, "said the spokesman. "Diesel fuels primary and secondary transportation of our product and the estimated cumulative impact of this increase is Rs 6.75 per 11.8kg cylinder or Rs 0.57 per kilogramme."
Expressing concern about the affordability of product, LPGAP, which comprises LPG marketing companies licensed to operate by the Oil and Gas Regulatory Authority, urged the government to revisit the LPG producer price policy. "The current policy forces higher pricing for this largely-indigenous product and at current levels will discourage demand," said the spokesman. "LPG marketing companies have strived to ensure the availability of affordable LPG during winters, but this will be a challenging objective if local producer prices increase as expected."
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