The government should formulate a policy to bring down the ex-plant price of liquefied petroleum gas (LPG) to the level of Rs 30,000-32,000 per ton with a view to curtailing the retail price of Rs 30-32 kilogram and to provide relief to the end-consumer.
LPG Distributors Association Chairman Abdul Hadi Khan has made this suggestion in his budget proposals sent the Federal Board of Revenue (FBR). He said that around 10 million people were associated with the LPG business, the government should, therefore, make 50 percent cut in sales tax imposed on LPG, in the 2008-09 budget.
He said that routine annual shutdowns of LPG plants by the producers, carried out for the maintenance purpose, caused an imbalance in demand and supply position. Thus, the government should frame an import mechanism to bridge this gap between supply and demand so that people could get product at the local price.
Khan said in other countries, the LPG was given very much importance, but in Pakistan it had not been given any importance, despite the fact that it was known as "fuel for the poor".
Because of increase in the prices of petroleum products, he said, the LPG had become even more important, as the reduction in its prices could cut the oil import bill of Pakistan. He said increase in price of local LPG was benefiting smugglers and except for the producers, all other stakeholders felt themselves unsecured. He said fixation of ex-plant price in the new budget would not only result in equal distribution of profits among all stakeholders, but would also discourage the smuggling from Iran.