ISLAMABAD - The LPG marketing companies, including the state owned Sui companies, while challenging the Ogra writ, are selling the liquefied gas at rate higher by up to Rs100 per kilogramme than the regulator determined rate. Even the state-owned Sui Southern Gas Company Limited (SSGC) is selling the LPG at Rs3300 per 11.8kg domestic cylinder which is Rs600 higher than the Ogra determined rate of Rs 2702/11.8kg domestic cylinder. Since SNGPL is also getting LPG from SSGCL, therefore its rate is also higher than Ogra determined price.
Ogra’s LPG rate is Rs229/ kg for April 2023 but the state owned Sui companies are selling gas at Rs280 per kg while the other private companies are selling it at around Rs330/kg. Irfan Khokhar, Chairman of the LPG Industries Association, blamed the state owned SSGC for its involvement in the black marketing of LPG. The black marketing of liquefied petroleum gas (LPG) in Pakistan has reached alarming levels of nearly Rs750 million (US$2.6 million) per day, he claimed. Price violators are exploiting the political and economic unrest, leaving the government unable to control the skyrocketing prices, he maintained.
This situation has given rise to a gas mafia that is exploiting the price hike by engaging in widespread black-marketing activities across various regions of the country. The importers and quota holders especially SSGC have ganged up and sold the gas to poor consumers at exorbitant prices in the range of Rs100 to 150/kg above the government’s notified prices in major urban centers and far-flung areas. The country’s daily consumption of LPG is 5000 tons (5 million kilograms).
The price manipulators are increasing the price day by day, with the illegal traders increasing the price by Rs10/kg, domestic cylinder by Rs100, and commercial cylinder by 400 rupees. In major cities, LPG is being sold at over Rs320/ kg, and in hilly and far-flung areas, it is being sold at Rs350. In Gilgit Baltistan, the product price has reached Rs370/kg, which is significantly higher than the OGRA’s notified price of Rs229/kg, he claimed.
The Oil and Gas Regulatory Authority (OGRA) however has failed to control the situation, despite its slashing the LPG price by Rs100 per kilogram to Rs229/kg for domestic and commercial consumers for April 2023 due to global gas prices drop.
It is worth mentioning here that Aramco, the Middle Eastern oil producer, had reduced the contract price (CP) of propane and butane to Asia for April 2023 by $165/ton a month ago to $555/ton and $545/ton, respectively, down by $195/ton. Propane and butane are two significant components of LPG sold to Asian countries, Khokhar claimed. In Pakistan, the applicable prices of LPG are calculated on a 40:60 ratio of propane to butane. Any changes in the CP of these two components can have a significant impact on the LPG prices in Pakistan. But, unfortunately, the government’s lack of control over LPG prices has led to an alarming situation for both the government and the general public. Consumers are forced to pay exorbitant prices for LPG, which has become an essential commodity for households and businesses alike. Chairman of the LPG Industries Association criticized the government’s policies towards the LPG industry, stating that they have resulted in a negative impact on the sector.
He is calling for taxes on LPG to be waived, citing the high cost of taxes which LPG distributors have been paying, and for the government to restart the LPG production plant of Jamshoro Joint Venture Limited to ensure a sustainable supply of cheaper LPG. Khokhar also suggested that the government should treat the LPG industry in the same way as the LNG sector, where no taxes are imposed, which would allow LPG to be supplied to domestic consumers at a lower cost than piped gas. When contacted, Imran Ghaznavi, Executive Director and Spokesperson Ogra, said that Ogra would take action against those selling LPG at higher rates.
