Govt raises LPG rate by Rs11.56 to Rs277.8 per kg

ISLAMABAD-The government Tuesday increased the rate of indigenous liquefied petroleum gas (LPG) by Rs11.56 per kg, which will jack up the price of 11.8-kg domestic cylinder by Rs 136.41 for March 2023. According to notification issued by Oil and Gas Regulatory Authority (OGRA) on Tuesday, the price of indigenous LPG, also called a poor man’s fuel, has been increased by Rs11.56 per kilogram (or 4pc) to Rs277.8/kg against Rs266.2/kg in February 2023. Similarly, the 11.8-kg domestic cylinder price increased by Rs136.408 from Rs 3,141.3 in February 2023 to Rs3,277.7 in March 2023. The price of 45.4-kg commercial cylinder will increase by Rs525 and will reach Rs12,611 in March 2023 against the February price of 12,086. As per the Ogra calculation, the producers’ price of LPG (propane 40 percent and butane 60 percent) has been determined at 195,732.8/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 Rs2,790.4/11.8kg cylinder has been worked out.
The marketing/distribution/transportation margin has been set at Rs35,000 per ton (Marketing margin of Rs17000/ton, distribution margin of Rs10,000/ton, and transportation margin of Rs8000/ton) or Rs413 per cylinder.  Prior to the imposition of an 18pc general sales tax (GST), the consumer price would be Rs200,401.8 per ton, while the price of the 11.8kg cylinder is Rs2364.7 per cylinder. Additionally, a GST of 18pc on Rs200,401.8 per ton would be Rs36,072.3/ton or Rs425.65 for a 11.8-kg cylinder. The maximum producer price with GST would be Rs236474.1/ton or Rs2790.4 per cylinder. Interestingly, poor consumers are 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. It is worth mentioning here that for February also the price of LPG was jacked up by over 30pc (Rs61.8/kg and Rs730/11.8-kg domestic cylinder). In January 2023, the domestic cylinder price was Rs2,411 which had reached Rs 3,141.3 after the 30pc hike. LPG is being used for cooking purposes in areas where piped natural gas is not available.

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