ISLAMABAD: The government has notified another increase in liquefied petroleum gas prices for November, with open-market rates running at twice the official price amid a shortage caused by the U.S.-Iran war.
In a notification issued Saturday, the Oil and Gas Regulatory Authority set the LPG price at 294,075 rupees per tonne for November, up from 279,341 rupees the previous month. The official retail rate for an 11.8-kilogram domestic cylinder is now 3,470 rupees, an increase of 173 rupees. The official LPG rate stands at 294 rupees per kilogram.
The regulator said the producer price is linked to the Saudi Aramco contract price and the dollar exchange rate. It said the Saudi Aramco-CP rose 6.47% from the previous month while the average dollar exchange rate dipped 0.12%, pushing the consumer price up by 14.73 rupees per kilogram.
In the open market, LPG is selling for as much as 630 rupees per kilogram, while company-operated franchises are charging up to 400 rupees per kilogram. Many warned the crisis would worsen because of the gas shortage.
LPG Distributors Association of Pakistan Chairman Irfan Khokhar said the situation is serious because of the closure of the Iranian border. He said at least 70% of LPG is imported from Iran and only 30% is produced locally.
"The government has to make serious efforts to control market manipulations," Khokhar said.
Separately, LPG marketing companies threatened to shut down their businesses starting Nov. 16 if the private sector is sidelined in the upcoming LPG policy. Pakistan LPG Marketers Association Chairman Ali Haider warned of a strike from that date if the government implements the policy. He said the government should not reverse the deregulation of LPG and that supplies are short because of the border closure.
"Out of around 1.3 million tonnes, only around 225,000 is imported from the Gulf, and that too has been mainly imported by the private sector," he said, adding that the ProGas terminal at Port Qasim is under the control of Sui Southern Gas Company, which "imported LPG around seven months back."
The association also wrote to Petroleum Minister Ali Pervaiz Malik, saying the draft policy sent to the prime minister included no input from the private sector. It called for the complete deregulation of the LPG sector.
The association said the 2016 LPG policy imposed a petroleum development levy of 4,669 rupees per tonne on locally produced LPG to subsidize state-owned entities such as PSO, Parco and SSGC to import LPG during winters and emergencies like the current one.
"Despite billions of rupees collected in terms of PDL through this formula, the state-owned entities have failed to import LPG during these days," Haider alleged.
