The Oil and Gas Regulatory Authority (OGRA) has slashed the price of indigenous liquefied petroleum gas (LPG) by Rs462.78 per 11.8kg domestic cylinder for the month of April 2020, due to low consumption and decline in petroleum price globally.
On Tuesday, the OGRA issued a notification, which fixed the price of 11.8kg domestic cylinder as Rs1,067.39, which was Rs1,530.17 in March. In other words, 30 percent or Rs40 per kg reduction in the prices of domestic cylinder has been notified.
The prices of commercial cylinder also have also been reduced by Rs1,781 to Rs4,107, which was fixed at Rs5,889 per commercial cylinder in March. A reduction of Rs90 per kg has been notified. However, contrary to the government's notified prices, the LPG is being sold at exorbitant prices, signaling towards the weak administrative control of the government machinery.
Last week, Special Assistant to Prime Minister Nadeem Babar admitted that the LPG cylinders were not available on notified prices, and assured the media persons that the government would strengthen the respective wing of the LPG in the OGRA.
The prices of Saudi Aramco was drastically reduced by $228 per metric tone from $465 per metric ton to $237 per metric ton, due to spread of coronavirus spread and low consumption.
According to the OGRA notification, the producers price of the LPG (propane 40 percent and butane 60 percent -two components of the LPG- has been determined at 37,645.08 metric ton (MT).
This producers' price included excise duty of Rs85/metric ton, excluding petroleum levy. And under this head, the producer price of 11.8kg cylinder has been worked out at Rs444.21 per 11.8 kg cylinder.
As per the notification, the marketing/distribution margin has been set at Rs35,000/MT and Rs413/11.8kg cylinder, a petroleum levy of Rs4,669/ metric ton will be also charged, which will be Rs55.09 for 11.8kg cylinder.
Prior to general sales tax (GST) imposition, the consumer price (ex-GST), the price will be Rs77,314.08/metric ton and the 11.8kg cylinder price is Rs912.30. The GST of 17 percent or Rs13,142.39/metric ton will be imposed and it will beRs155.09 for 11.8kg cylinder. The final metric ton LPG consumer prices for April is set at Rs90,457.47 or Rs1,067.39 per 11.8 kg cylinder.