LAHORE –The Oil and Gas Regulatory Authority (Ogra) Monday imposed petroleum levy of Rs3,500 per ton on liquefied petroleum gas (LPG).

This is the third time since 2011 that petroleum levy has been imposed on locally produced LPG. On previous occasions, the Lahore High Court had suspended the imposition of the levy, terming it discriminatory towards local LPG production.
“The Levy has been imposed in order to promote LPG imports at the cost of local production” said Bilal Jabbar, the spokesman for the LPG Association of Pakistan. Under the Petroleum Products Ordinance 1961, the government is authorised to charge petroleum levy up to Rs11,486 per ton. “We fear that this is the initial step and expect the government will increase the amount of the levy from Rs3,500 to Rs11,486 per ton in the coming months” Bilalsaid.
The new notification is likely to be challenged again by LPG producers.
State owned Parco and the OGDCL had announced a reduction in their LPG base stock price from Rs92,900 to Rs88,700 per ton on Saturday, following the decline in Saudi Aramco CP.  That price will most likely be revised upwards following the imposition of the petroleum levy.
“LPG consumers will now have to pay more for the product as a result of the levy” Bilalsaid.