LPG price jacked up by Rs1.66/kg
The Oil and Gas Regulatory Authority (Ogra) on Friday announced an increase of Rs1.66 per kg in the price of liquefied petroleum gas (LPG).
It has set the new price of one kg of LPG at Rs220.42.
The price of an 11.8 kg domestic cylinder of LPG has gone up by Rs19.62.
Its new price is Rs2,600.97.
The new LPG price took effect from Friday (yesterday).
Last month, Ogra had slashed the price of LPG by Rs13 to Rs218.76 per kg.
The domestic cylinder was being sold for Rs2,581.35 and the commercial cylinder at Rs9,931.65.
The LPG Industries Association of Pakistan had said back then that keeping in view the efforts of the government to provide relief to the masses, further reduction could be made in the price.
“The current official rate can be slashed by about Rs100 per kg, or around 50%,” the association’s chairman Irfan Khokhar had said in a statement.
He had added that the task could be achieved by following the formula proposed by the LPG association.
“Reduction in the price for Pakistan’s five largest LPG producers and making [it] affordable for the poor consumers will lead to a marked reduction in deforestation, thus the dream of greener Pakistan will also come true.”
In March, a report was published wherein it was stated that importers had misled the government over the prices of imported LPG.
This was done to manage the approval of the proposed LPG policy to make additional windfall gains at the cost of the national exchequer.
Due to monopoly of LPG importers in the policy, local producing companies including Oil and Gas Development Company Limited (OGDCL), Pakistan Petroleum Limited (PPL) and Pak Arab Refinery Limited (Parco) were facing hit in revenues.
Since the government was a major shareholder in these companies, therefore any loss to these companies was a direct hit on its revenues.
The report prepared by the sub-body of the Cabinet Committee on Energy on the new policy read that the price of LPG import was in CP Plus $50 per ton. This provided justification to continue petroleum levy on locally produced LPG as a balancing act of prices between local and imported ones.
However, documents available with The Express Tribune revealed that it was in fact a deception that importers were importing LPG at CP plus $50 per metric ton.
The Petroleum Development Levy (PDL) on locally produced LPG is unfairly being applied to balance the prices as 100% of the product was imported from Iran, which is currently cheaper by Rs23,000 to Rs28,000 metric tons compared to the locally produced one due to disparity in taxations and waiver of regulatory duty on imports. Imported LPG is traded at CP minus $180 to $200 per metric ton, however, in summaries calculation it was being shown as CP plus $50 per metric ton, which was incorrect.