New guidelines on LPG air-mix plants okayed

Private sector will be free to set up such plants, notify consumer tariff

ISLAMABAD:

The government has approved new policy guidelines on the installation of liquefied petroleum gas (LPG) air-mix plants by the private sector.

Under the new regulations, the private sector will be free to set up LPG air-mix plants on commercial considerations by bearing the cost and liabilities subject to meeting the regulator’s, the Oil and Gas Regulatory Authority (Ogra), licensing and operational requirements.

The supply preference or dedication mentioned in the LPG (Production & Distribution) Policy 2016 will not be applicable to the air-mix plants developed by the private sector.

However, the air-mix plants may be entitled to bulk LPG purchase at the producer price notified by Ogra from time to time. Tariff for the air-mix plants, developed and operated by the private sector, will be deregulated.

The status of air-mix plant licences will be the same as that for LPG storage, filling and distribution plant licences and that they will also be entitled to LPG import governed by the prevailing trade policy and any other applicable policies/ law/ rule or instructions/ directives of the federal government.

Under the guidelines, the air-mix plant licensee will not prohibit consumers/ suppliers from switching to alternative, competing fuels supplied by any third party (be it piped natural gas, LPG cylinders, another air-mix plant, virtual LNG pipeline, etc).

The licensee will notify a monthly tariff for consumers and also submit details of tariff to Ogra by the 10th of every month.

The regulator will ensure that the air-mix plant licensee does not take any measures to prevent the marketing of LPG cylinders in the area where the plant supplies the fuel.

The resolution of complaints in respect of the pipeline network for LPG distribution and its metering for households will be undertaken by Ogra, as being done in the natural gas sector.

“Ogra, being a regulator of LPG sector, is advised to comply with policy guidelines,” the Petroleum Division said.

Published in The Express Tribune, May 30^th, 2023.

Like Business on Facebook, follow @TribuneBiz on Twitter to stay informed and join in the conversation.