OGDC reduces LPG price third time this month

Association seeks to delink local rates with global prices.

ISLAMABAD:

State-owned LPG producer Oil and Gas Development Company Limited has reduced LPG price for the third time this month to Rs58,000 per ton exclusive of duties and taxes, making it more cheaper than all other fuels including petrol, diesel and CNG, according to LPG Association of Pakistan.

The latest reduction in base stock price of Rs7,000 per ton came following piling up of unsold stock and increase in domestic production which is up by 25% since start of the year.

“LPG demand typically begins to slacken with the onset of summer. However, this year demand has also been affected by an over supply of product both locally and from cheap and under-invoiced Iranian imports,” said LPG Association of Pakistan Spokesperson Belal Jabbar.

The current producer price is $225 or Rs20,000 per ton below the Saudi Aramco Contract Price with which LPG prices have remained indexed. The drastic reduction in price is effectively a de-linkage from the international price benchmark and augurs well for the LPG Industry as the product has become cheaper than petrol, diesel and even CNG.

“In light of the increasing domestic production which has made imports altogether redundant, we urge the Federal Minister Dr Asim Hussain to immediately notify de-linking of LPG prices from Saudi Aramco CP as this will keep the product affordable for the common man,” said Belal.

The revised price of LPG companies for their distributors will be Rs970 for domestic and Rs3,732 for commercial cylinders. Similarly, distributor price for consumers will be Rs1,125 for domestic and Rs 4,320 for commercial cylinders. Retail prices are expected to be Rs90 per kg in Sindh and Balochistan, Rs95 in Punjab, Rs100 in Khyber-Pakhtunkhwa, Rs105 in AJK and Rs115 per kg in northern areas.

Published in The Express Tribune, May 12^th, 2012.