LPG prices remain unchanged

Following the decision of the state Owned Liquefied Petroleum Gas (LPG) producing companies, the LPG marketing companies have not changed their prices for the fifth successive month. Two leading state run LPG producing companies - Oil and Gas Development Company Limited (OGDCL) and Pak Arab Refinery Company (PARCO) - have maintained their base stock prices at Rs 75,000 and Rs 75,500 per ton (exclusive of taxes).
The Government of Pakistan has not allowed the LPG producers to increase LPG price since November 2013 as a result during the on-going winter the commodity prices remained within the reach of consumers. The decision of the government is not only appreciated by the LPG consumers but also by LPG marketing companies, however during the winter unregistered LPG dealers overcharged the masses.
In winter 2012-13, the LPG prices touched record level of Rs 250 per kg in hilly areas of Gilgit, Azad Kashmir and FATA, but this year the prices remained below Rs 170 per kg, due to the timely import of the commodity as well as enhanced local production which in the past six months has reached 1,450 tons per day against a year back level of 1,100 tons per day. Total LPG demand in the winter stands at 1,600 ton per day of which 1,450 ton per day is local production, while remaining 150 ton per day is being imported.
The country's LPG production is expected to increase by 700 ton per day within next few months, which would end Pakistan's spending on import of LPG.
The current producer price is Rs 15,500 per MT lower than the international Saudi Aramco Contract Price of USD 864 per MT. "We are thankful to the Ministry of Petroleum for the steps it has taken in de-linking local Producer Prices from Saudi Aramco CP and maintaining their current prices," said Belal Jabbar, spokesman for the LPG Association of Pakistan.
The resultant retail prices will, therefore, remain stable at Rs 115 per kilo in Sindh and Balochsitan, Rs 120 per kilo in Punjab, Rs 125 per kilo in KPK and AJK and Rs 140 per kilo in Northern Areas and Gilgit Baltistan.
This winter has witnessed one of the lowest LPG prices in the recent years, as local producers have fixed prices of LPG in line with market forces, keeping in view demand and supply and not linked it with Saudi CP, which many consider as an inflated price benchmark.
"We request the government to announce a clean disconnect policy according to the Saudi Aramco CP, allowing LPG producer prices to fall further. Currently these prices account for 80% of the component of the end consumer price" said Belal.