LAHORE – OGRA’s notification to cap LPG consumer prices at below the cost of imports has drawn heavy criticism from LPG marketing companies that had planned to import it in a bid to cater shortages in Ramazan.
“Without consulting LPG stakeholders, the Oil & Gas Regulatory Authority fixed maximum consumer price for local and imported LPG as Rs 83.3 and 96.27 per kilo or Rs. 983 and Rs. 1136 per domestic cylinder. The price is inclusive of distributor margin of Rs 70 per cylinder,” said Belal Jabbar, the spokesman for the LPG Association of Pakistan (LPGAP).
The Association said that approximately 40 LPG companies out of 91 operating in Pakistan rely on LPG imports for servicing their distributors and market demand and that the LPG imports which typically represent only 10 per cent of the country’s demand usually cater up to 30 per cent demand in the month of Ramzan. According to the LPGAP, the LPG Imports are currently available for Rs. 85,700 per ton at Port Qasim.
The cost associated with transporting the product to Punjab and Northern Areas is between Rs 7,000 to 10,000 per ton. The landed cost of imports is higher than the maximum consumer price mandated by OGRA.
“We are deeply disappointed that OGRA has chosen to fix prices without consulting stakeholders and especially companies that have already or were planning to import LPG to cater for Ramazan” said Belal Jabbar the spokesman for the LPG Association of Pakistan. At least two importers have dropped plans for importing LPG in lieu of OGRA’s price caps.
“The present local production is insufficient to meet LPG demand in Ramazan, which may increase in monsoons. In the absence of imports LPG companies fear hoarding and black marketing of LPG by distributors”.