LPG sector demands say in new policy

Stakeholders of the liquefied petroleum gas (LPG) sector have requested the Oil and Gas Regulatory Authority (Ogra) to take them on board while finalising the LPG Policy 2021.

In a letter written to the Ogra chairman on Friday, Pakistan LPG Marketers Association (PLPGMA) Chairman Farooq Iftikhar said that the Ministry of Energy had drafted the LPG policy in haste and it was not shared with any LPG marketing company for feedback or comments.

Read: LPG sector seeks probe into imports

He pointed out that the proposed policy was different from the one that was earlier prepared by the Planning Commission, which was drafted after inviting all stakeholders to provide their feedback.

“The association has been informed that a meeting was held recently to discuss the new policy by inviting selected state-owned companies and excluding private sector LPG producers and marketing companies,” he said.

Iftikhar pointed out that the regulator was aware that the incentives being offered to importers posed a danger to the local LPG market because cheaper Iranian product had flooded the market.

He highlighted that the Iranian LPG imported into Pakistan was cheaper by at least Rs30,000 per ton compared to the locally produced gas and called for imposition of additional taxes and duties to take its price to the level at which locally produced LPG was sold.

“Price has become the only parameter for the sale of the product and consumers do not consider quality or the fact that most companies are operating at negative margins with zero incentive left to invest in safety infrastructure,” he said.

“To make matters worse, the new policy is advocating for a number of measures, which are not only uncompetitive in nature, but will also cause further erosion of investor confidence.”

Read more: Govt agrees to address LPG producers’ concerns

Measures such as allowing everyone to import LPG without having a valid Ogra licence, continuation of disparity in taxes on imported and locally produced LPG and introduction of additional incentives for imports were a matter of concern for the stakeholders, he said.

The PLPGMA chairman urged the regulator to take strict notice of the anomalies being propagated in the new policy.

He also appealed to Ogra to issue directives for circulating the draft of the proposed policy among public and private sector LPG producers and companies, and obtaining their feedback before finalising the policy.