The price of liquefied petroleum gas (LPG) has gone up by Rs 5 per kilogram with immediate effect. The price of a domestic cylinder, weighing 11.5-kilogram LPG, has increased by Rs 50 while a commercial cylinder has become dearer by Rs 200. The LPG Distributors Association of Pakistan has warned that price would further increase in coming days due to non-availability of the product followed by the disruption in LPG imports.
According to the association, following the disruption in the LPG imports due to intervention of the regulator, the LPG crisis has started as prices have gone up by Rs 5 per kilogram. In a statement, Chairman LPG Distributors Association of Pakistan Irfan Khokhar said the LPG importers played a key role in bridging gas demand. However, he said that intervention of the Oil and Gas Regulatory Authority (Ogra) in determining prices had caused millions of rupees loss to the industry this year. He said that such practices by the regulator would cause disruption in the LPG supply through imports.
He said the import of the LPG had been reduced and during last two months, only one letter of credit (LC) had been opened due to intervention of the Ogra by writing a letter to determine the price which was not feasible for importers. He said that shortage of the LPG product was leading to hike in prices due to non-availability of the product.
He appealed to the government to find out a permanent solution by formulating a policy to stabilise prices to make imports feasible. He said Petroleum Minister Shahid Khaqan Abbasi had already mentioned during the LPG conference held in Lahore on March 14 that the policy would be formed to make imports feasible by bridging price gap between locally and imported product. Irfan Khokhar said the government should immediately announce the policy to enhance supply of the LPG through imports.
He said the government had already taken initiatives that led to increase supply of the LPG to 2,801 tons per day in FY 2015-16 as compared to 1,899 tons per day in FY 2014-15. The consumption increased to 3,055 tons per day from 1,915 tons per day. After the increase, the prices of the LPG stood at Rs 90 per kg in Karachi (Rs 1,030 per domestic cylinder); Lahore, Gujranwala, Faisalabad, Jhelum, Kasur, Sahiwal, Sialkot, Daska and Peshawar, Rs 95 per kg (Rs 1,090 per cylinder); Rahim Yar Khan, Sadiqabad, Mirpur Azad Kashmir and Islamabad, Rs 110 per kg (Rs 1,270 per domestic cylinder); and Murree, Abbottabad, Bagh, FATA and Kotli, Azad Kashmir, Rs 115 per kg (Rs 1,330 per domestic cylinder).
However, he hailed the efforts of the government for creating environment for imports that played a key role in enhancing supply of the LPG to cater demand of domestic, commercial and industrial sectors. According to the report 'State of Regulated Petroleum Industry, 2015-16,' released by the Ogra, the LPG plays an important role in energy mix of Pakistan as it provides a cleaner alternate to biomass based sources, especially in local area, where natural gas is not available. The size of LPG market during the period under review was 1,115,130MT per annum, mainly consumed by domestic, commercial and industrial sectors with respective shares of 38 percent, 37 percent and 25 percent respectively.