State-owned liquefied petroleum gas (LPG) producer Pak Arab Refinery Company (Parco) has increased LPG base-stock price by Rs4,000 to Rs72,000 per ton, starting July 3.
“LPG producer prices had been below Saudi contract price levels,” said a spokesperson from LPG Association of Pakistan (LPGAP). “Producers had the option to either keep prices unchanged or increase them to match the Saudi Aramco contract price for July.” Local LPG producer prices had been kept in line with Saudi Arabian export prices since January 2007.
The Saudi contract price, however, had decreased from $897 per ton for June to $839 per ton for July, and there was speculation that local LPG producers would slash prices by $58 per ton. But this is yet to happen.
“Oil and Gas Development Company Limited (OGDCL) revised its prices six times and Parco five times in the last one month to adjust to decreasing demand,” said the spokesman.
At an exchange rate of Rs86 per dollar, the ceiling for base-stock price of Pakistani LPG producers was Rs77,142 per ton during June, while for July the ceiling stood at Rs72,154.
Parco was selling its product at Rs68,000 per ton and will increase it to Rs72,000. OGDCL, which has been selling its product at Rs65,000 per ton, is also likely to match the new Parco price.
Revised LPG prices usually come into effect from the third of each month. It is critical that consumers, policymakers and market watchers operate on accurate information, rather than speculation, according to the spokesperson.
“The demand situation has improved marginally while local production has gone down,” he said, adding LPG marketing companies are expected to import over 6,000 tons ahead of Ramazan.
Published in The Express Tribune, July 2nd, 2011.
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