Ministry criticised for failure to providing cheap fuel

The Liquefied Petroleum Gas Association of Pakistan has reprimanded the Petroleum Ministry for failing to respond to its national duty of providing cheap fuel to the public and accused it of profiteering by auctioning its production too high. Association Chairman Farooq Iftikhar, who too is a former Lahore Chamber president, on Saturday claimed, "It is a matter of concern that the ministry is playing a role of silent spectator and taking no measures to rescue the local liquefied petroleum gas industry, which is struggling for survival while smugglers of low quality, spurious and adulterated liquefied petroleum gas are playing freely. Importers are on the rampage importing over 20,000 metric tonnes as import price is extremely attractive."
He also claimed that the government was helping the importers by keeping the prices high. "We have time and again urged the Oil and Gas Regulatory Authority and the ministry since December that producers have consistently been setting their base-stock prices far above the monthly Saudi Aramco Contract Price, failing to pass on the benefit of reducing the global prices to consumers. The current Saudi CP is $333 per metric tonne while the Oil and Gas Development Company Limited has notified its base-stock prices at Rs 43,000 per metric tonne and the Pakistan Refinery Limited PRL at Rs 42,000 per metric tonne and the Mid-Country Refinery PARCO at Rs 45,000," he added.
He said such pricing decisions were in apparent disregard of the fuel production and distribution rules, specifically Article 2(R). "Additionally, since virtually all producers have signature-bonus-and-profit-sharing mechanisms now in place with marketing companies, the actual base-stock price is even higher than notified. As a result, locally produced fuel is far too expensive than it reasonably ought to be." He went on, "Several producers have also failed to abide by Article 18 of the fuel rules that requires the base-stock price to remain fixed for at least a month to foster stability and prevent speculative practices. These producers have revised their base-stock prices several times in a given month.