LPG cylinder prices go up

Liquefied Petroleum Gas (LPG) companies have increased prices of domestic and commercial cylinder prior to imposition of regulatory duty (RD) on imported LPG, an official of the Ministry of Energy (Petroleum Division) told Business Recorder here on Thursday. The official revealed after imposing a petroleum levy on locally-produced LPG at the rate of Rs 4,669 per ton, the government has decided to impose the same amount of regulatory duty on the imported commodity.
On the request of Petroleum Division, the Ministry of Finance has directed the Federal Board of Revenue (FBR) to impose regulatory duty as the division is not authorized to impose petroleum levy on imported fuel. As per Petroleum Products Ordinance 1961 and LPG Policy 2016, levy can be imposed only on local production of the LPG. On the other hand, the government is delaying in notifying the new prices, while the LPG companies unilaterally increased the prices of LPG by Rs 50 for domestic and Rs 200 for commercial cylinder, the market sources said.
The government constituted a seven-member LPG pricing committee in October to finalize the guidelines for the Oil and Gas Regulatory Authority (OGRA) for implementation of LPG prices across the country. The director general of liquefied gases (LGs), Ministry of Energy (Petroleum Division), is convener of the committee. However, the LPG pricing committee has to determine the new price yet. Under the LPG Policy 2016, it is the government's responsibility to notify the LPG prices, while the OGRA will implement it. Since the government didn't notify the LPG prices; therefore, the regulator has no role to play in this regard, the official said.
To meet the revenue collection target of Rs 2 billion set out as petroleum levy on LPG for financial year 2017-18, collection of levy on local production of LPG has been started with effect from November 1, 2017. The imposition of a regulatory duty on LPG import equivalent to levy proposed to be imposed on local production of LPG will provide level-playing field to both producers and importers.