LPG sector awaits incentives for greater share in energy mix

ISLAMABAD-The efficient use of liquified petroleum gas (LPG) can help ease the natural gas shortage in Pakistan, particularly during the winter when its demand for domestic use increases substantially, reported WealthPK.

Vice-Chairman of All Pakistan LPG Distributors Association Ali Haider while talking to WealthPK said, “LPG represents a substitute for natural gas that’s consumed primarily in the domestic sector for cooking and heating purposes. It is an important source of energy to run the economy.’’ “LPG started to replace natural gas because of ease of portability that it offers to the consumers and its competitive pricing compared to natural gas.” Ali said around 75 percent of the LPG consumed was produced locally while the remaining 25 percent was imported mainly from the Gulf states and neighbouring Iran.”

“It is gradually becoming a popular domestic fuel among the people who live in far-flung areas and where natural gas infrastructure does not exist. The people in the urban centres also turned to LPG due to low natural gas pressure and outages”. He said, “The government should suspend taxes and duties to support the industry until we have a cheaper alternative and give more incentives to LPG producers and importers so that its shortfall in winter could be tackled and its share in the power mix could be enhanced.” Ali also emphasised the need to announce the long-awaited LPG Policy and incentives to both local producers and importers of the commodity. ‘’If there is a policy, it will definitely provide for regular supplies at affordable rates. Therefore, it would be wise if a comprehensive policy is framed for the consumers’ benefit.” According to the latest figures given in Economic Survey of Pakistan 2021-22, LPG currently accounts for about 1.2 percent of the total primary energy supply in the country. This low share of LPG in the total energy mix is mainly due to the supply constraints and higher price of the commodity in relation to competing fuels like natural gas, wood, etc. The current size of LPG market is around 1,061,447 MT/annum. LPG is primarily supplied for the domestic fuel requirement, especially in the natural gas-starved areas and during peak times in the urban territories. LPG’s use as a domestic fuel will deter deforestation in the country’s hilly areas and provide a comparatively healthier and hygienically safe alternative to the citizens.

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