The import of Liquefied Petroleum Gas (LPG) during past seven months has reached 286,000 tons, which is likely to touch 500,000 tons showing a 100 percent increase due to reduced international prices. Local LPG production is likely to increase by 12,000 tons per month within next few months as state owned Oil and Gas Development Company (OGDCL) has completed installation of a state of the art LPG plant in Kunar Pasaki.
Talking to Business Recorder on Tuesday, Mohammad Irfan Khokhar, Chairman, All Pakistan LPG Distribution Association said that auto sector had become largest consumer of LPG in the country. He said at present LPG was the cheapest fuel costing Rs 32-25 per litre against Rs 47 of CNG and Rs 66 of petrol.
The Oil and Gas Regulatory Authority (Ogra) had issued 155 licenses for establishment of Liquefied Petroleum Gas (LPG) outlets out of which seven had become operational, he added. He said as a result of increase in local LPG production which was likely to reach 2,500 tons a day from current 1,800 tons a day and removal of international sanctions against Iran LPG demand/supply situation was not likely to remain in balance.
Due to serious gas shortage from November 2013, gas supply to Punjab based CNG station was suspended as a result at present over 1,000 Punjab based CNG stations are shutdown and around 1,000 are operating on imported Liquefied Natural Gas. Irfan said closed CNG stations could be made operational if the Ogra granted licenses to the owners of those outlets, adding it would not only reduce burden on foreign reserves but would also help reduce omission of toxic gases as LPG was environment-friendly.
He urged the government to reduce port charges on LPG imports from $32 per ton to $10 per tons as per international standards as well as abolishing advance tax on the imports, saying that cumulative impact of those measures would reduce LPG price by Rs 7 per kg.
He said that in 2014, Pakistan imported a total 62,000 tons of LPG which in the year 2015 jumped to 145,000 tons and in first six months of 2016 the import of commodity had reached 286,000 tons which by the end of year was likely to cross 500,000 tons.
Khokhar urged the government to reduce taxes on the LPG which would further bring down the prices and help save foreign exchange being spent on the import of expensive crude oil, refine diesel and petrol.