Govt raises LPG price by around 13.45pc

ISLAMABAD-The government on Monday increased the price of liquefied petroleum gas (LPG) by around 13.45 percent, jacking up the cost of domestic cylinder by Rs282 while commercial cylinder’s price will go up by Rs1,083 for the month of August.
According to notification issued by the Oil and Gas Regulatory Authority (OGRA), the price of liquefied petroleum gas (LPG) will go up by Rs23.9 per kg in August as compared to the previous month. As per the notification, the price of per kilogram of LPG will be enhanced to Rs201 in August, up from Rs177/kg in July 2023. With the new prices the cost of 11.8kg domestic cylinder will go up by Rs282, bringing its cost to Rs2,374, while the commercial cylinder (45.4kg) will go up by Rs1,083, to Rs9,132. In July, the price of domestic cylinder was Rs2,092 and commercial cylinders Rs8,049.
OGRA has determined the producer price of LPG, assuming a composition of 40 percent propane and 60 percent butane, to be Rs130,802/ton. This price includes an excise duty of Rs85/ton, while excluding the petroleum levy of Rs4,669/ton. Consequently, the total cost for an 11.8kg cylinder amounts to Rs1598.8. Prior to the imposition of an 18 percent general sales tax (GST), the producer price would be Rs135,471/ton, resulting in a price of Rs1,598.6 per cylinder. The additional GST on 135,471/ton would be Rs24,485/ton or Rs287.7 per 11.8kg cylinder.
Furthermore, OGRA has calculated a producer price of Rs1,886.3/11.8kg cylinder. The marketing/distribution/transportation margin has been set at Rs35,000 per ton, comprising a marketing margin of Rs17,000/ton, distribution margin of Rs10,000/ton, and transportation margin of Rs8,000/ton, resulting in a total margin of Rs413 per cylinder. The current LPG price structure imposes double taxation on consumers, with taxes applied both at the producer price and the consumer level (tax on marketing and distribution). This ultimately leads to higher LPG prices for consumers. In this calculation, the producer prices of LPG are subjected to an 18 percent GST, amounting to Rs24,384.8/ton or Rs288/cylinder. Additionally, consumers are taxed with an 18 percent GST of Rs6,300/ton or Rs74.34 per 11.8kg cylinder on the marketing/distribution margin of Rs35,000 per ton.

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