ISLAMABAD-The government Friday slashed the price of indigenous liquefied petroleum gas (LPG) by Rs 49 per kilogramme, which will cut the cost of 11.8-kg domestic cylinder by almost Rs575.5 for April 2023.
As per the notification issued by Oil and Gas Regulatory Authority, with the decrease of 17.56 percent, a kilogram of LPG will be available at Rs228.8/kg in April as compared to Rs277.8/kg in March.  According to the notification, the prices for 11.8kg domestic cylinder will be Rs2702.2 for April against Rs3277.7 in March, after cut of Rs575.5. Whereas, the price of commercial cylinder (45.4kg) would reduce by Rs2214 and now would be sold at Rs10,397 in April as compared to Rs12,611 in March 2023.
As per the Ogra calculation, the producer price of LPG (propane 40 percent and butane 60 percent) has been determined at 154,398.25/ton. This price included excise duty of Rs85/ton while excluding the petroleum levy of Rs4,669/ton. Under this head, the producer price of Rs2,214.85/11.8kg cylinder has been worked out.
The marketing/distribution/transportation margin has been set at Rs35,000 per ton (Marketing margin of Rs17,000/ton, distribution margin of Rs10,000/ton and transportation margin of Rs8,000/ton) or Rs413 per cylinder.  Prior to the imposition of an 18% general sales tax (GST), the producer price would be Rs159,067.25/ton, while the price of 11.8kg cylinder is Rs1877 per cylinder. Additionally, GST of 18 percent on Rs159,067.25/ton would be Rs28,632.1/ton or Rs337.86 for a 11.8 kg cylinder. The maximum producer price with GST would be Rs187,699.36/ton or Rs2,214.85 per cylinder.
It is to be noted that the consumers are being double-taxed, as they have to again pay 18% GST of Rs6,300/ton or Rs74.34 per 11.8 kg cylinder on the marketing/distribution margin of Rs35,000 per ton.
Meanwhile, Chairman LPG Industries Association Irfan Khokhar said the country was already facing a gas shortage and demanded of the government to deal the LPG industry like it does with the LNG sector, where there are no taxes on it. If the government does so, then we can supply LPG to domestic consumers at less price than piped gas, he claimed. 
The government’s “insane policies” coupled with a high number of taxes have put a negative impact on the LPG industry. LPG distributors have been paying over Rs6 billion per annum under the head of taxes. The government should waive off taxes to ensure provision of cheaper LPG to consumers during the winter season, said Irfan Khokhar.
Demanding the government to restart the operation of LPG production plant of Jamshoro Joint Venture Limited (JJVL) in order to ensure supply of cheaper LPG on sustainable basis, Irfan Khokhar said that the closure of JJVL Jamshoro plant has incurred a loss of billions of rupees, in addition to a hike in LPG prices. This plant is closed for the last 33 months. Pakistan’s Local LPG production is 2000 tons/day while demand is over 5000 tons/day. LPG is being used for cooking purposes in areas where piped natural gas is not available.