In line with the Saudi Aramco Contract Price of July, LPG producers have increased prices from Rs 75,500 to Rs 83,500 per ton (inclusive of all taxes) with effect from 3rd July, 2011. This increase will translate into an increase of Rs 95 per domestic cylinder, said Belal Jabbar, CEO of Noor LPG.
Jabbar further said that more than 65 percent of Pakistan's LPG is produced by state owned entities including OGDCL, PARCO and PPL. LPG production from refineries has witnessed a drastic slump since January this year owing to the issue of circular debt. Depletion of natural gas fields, which are rich in LPG has only exacerbated the situation.
He said two LPG producing fields will be closed for annual maintenance in this current month of July, which may lead to a shortage of LPG in the market. He said, "LPG marketing companies are aware of the situation and have made firm commitments for importing 7,500 tons of LPG in this current month of July to ensure that adequate stocks of LPG are available for the month of Ramzan. We are confident that imports will mitigate any shortage that arises and should help in keeping prices reasonable for the consumer."
He further said the LPG companies are fully supportive of OGRA's decision to register LPG distributors, which will ensure safety and lead to stability in prices. Importing LPG to meet shortages, however, is an expensive solution. Pakistan has the potential to produce nearly 500 tons of LPG per day from existing natural gas fields b but the government needed to realise this potential, he added.