LPG prices fall by Rs2.5 per kg

Distributors want further price cut for industry’s survival.

KARACHI:

Prices of liquefied petroleum gas (LPG) fell Rs2.5 per kg to Rs112 to Rs120 across the country following a reduction in per-ton prices by gas producers.

Local producers slashed prices by Rs2,436 to Rs84,082 per ton. After the reduction, prices of 11.8kg cylinder dropped Rs30 to Rs1,300 to Rs1,380 while rates of 45.4kg cylinder fell Rs111 to Rs5,000 to Rs5,290.

All Pakistan LPG Distributors Association Acting Chairman Mohammad Atique Khan was of the view that for the survival of the LPG industry, prices should further fall by Rs2,500 per ton this month as due to a persistent increase in prices over the past one year more than 80 per cent Suzuki pick-ups and 75 per cent rickshaws had switched from LPG to compressed natural gas (CNG).

In far-flung mountainous areas too, he said, residential consumers were getting small cylinders filled with CNG at nearby outlets, which showed that LPG had lost its image as a poor man’s fuel. “This can lead to collapse of the LPG industry,” he added.

Khan further said LPG sales had dropped during Ramazan because of reduced demand, but just before Eid sales volume improved considerably. However, the high prices forced LPG distributors and retailers to curtail their profit margins, he said, adding many distributors had closed down their business following a sharp fall in sales.

He said owners of commercial vehicles and residential consumers in remote and underdeveloped areas – who were main consumers of LPG – had reduced their consumption and a further price cut was a must to lure them back to this fuel.

Khan said prices of imported LPG had also slipped from Rs104,000 to Rs99,000 after a decline in the international market and the price difference between imported and local fuel narrowed to Rs14,918 per ton. Local LPG is cheaper than imported gas.

Published in The Express Tribune, September 4^th, 2011.