The Ministry of Petroleum and Natural Resources (MP&NR) has resorted to delay in regulating prices of Liquefied Petroleum Gas (LPG) due to unknown reasons, it is learnt. According to petroleum ministry official, a summary for regulating the LPG prices was under consideration, but was not sent to the Economic Coordination Committee (ECC) of the Cabinet for final approval.
The official stated: "We have finalised modalities for regulating LPG prices due to expected increase in the commodity production. The production will increase by 700 tons per day and go up from existing 1,400 tons per day to 2,100 tons per day. We will send the summary to ECC for final approval during upcoming meeting of the ECC", the official added.
Giving details of the proposed summary, the official said that the Petroleum ministry has chalked out a formula in its summary to set the price of the commodity at Rs 92.50 per kilogram for all parts of the country, fixing it at Rs 92,529 per ton. And, in this manner, per kilogram price of LPG can be reduced between Rs 50 to Rs 108. As a result, domestic cylinder of 12kg will be available at Rs 1,092 across the country, which at present is being sold at Rs 1,600 in twin cities of Rawalpindi/Islamabad and at Rs 2,000 in Gilgit-Baltistan and in winter it touches Rs 2,500 mark.
Price of LPG in summer season in most parts of the country remain hovering around Rs 150 per kg and in winter it mounts to Rs 200 per kg, adding to woes of the people of remote and hilly areas where the commodity is being used as a fuel for cooking and lightening purposes.
Under the proposed LPG Policy 2014, Oil and Gas Regulatory Authority (Ogra) will issue price notification as the price will be regulated, and there will be the imposition of petroleum levy (PL) and Gas Infrastructure Development Cess (GIDC) on local LPG producers, while the collected amount under PL and GIDC will be used for giving subsidy on imported LPG so that foreign and local LPG can be sold at the same rates across the country.
"Taking cognisance of the issue, MP&NR has concluded that price deregulation policy introduced in 2000-01 has failed to achieve the objectives of availability of the product at affordable price. LPG is considered poor man's fuel, yet the same is being sold at over 20 times higher than natural gas for domestic consumers. Since 2000, the domestic LPG market has been experiencing various challenges including demand supply imbalance, cartelization, litigation and price distortion, "citing the summary the official said.
When contacted, spokesman of the petroleum ministry confirmed the information and said that in a bid to regulate the price of LPG, petroleum ministry is to dispatch a summary to ECC for necessary approval to put an end to the policy of deregulation of LPG price, as according to the ministry it has become inevitable to end the cartelization causing price hike, fleecing of the poor masses, besides saving fast decaying forests of the country.
Moreover, LPG Price Deregulation Policy 2000 has unfortunately failed in achieving its target. It was launched with a view to promote competition in business, besides making it an investment-friendly sector. The petroleum ministry has sought approval of LPG Policy 2014.
He was of the view that uniform price of LPG will contribute to minimising the intensity of ongoing gas crisis in the country and there will be low pressure on the system of Sui Southern Gas Company Limited (SSGCL) & Sui Northern Gas Pipelines Limited (SNGPL). The prices of LPG had registered an unprecedented increase since 2005, as it was available at Rs 17,000 per ton in 2005, which is now being sold at Rs 106,000 per ton, including all taxes. As per official figures, local LPG production in Pakistan stands at 1,400 tons per day, while Pakistan imports 3,000 tons of LPG per month. In 2005 per 11.8-kg domestic cylinder of LPG was being sold at Rs 450 or Rs 38 per kg, which is now being sold at Rs 1,450 and Rs 150 per kg, respectively.
According to official figures, 6.3 million households out of 25 million are connected with the systems of Sui Northern Gas Pipelines Limited (SNGPL) and Sui Southern Gas Company (SSGC) and are using natural gas as fuel. While the rest of the population is relying on firewood, LPG, diesel, coal or other fuel sources.