The recent notification by Ogra regarding the increase in the price of LPG for January 2024 has stirred concerns among consumers. The hike, amounting to Rs18.52 for an 11.8-kg domestic cylinder meaning Rs1.56 per kilo, reflects the ongoing challenges in the energy sector. This adjustment, while impacting household budgets, is also indicative of the broader natural gas crisis gripping the country.
The LPG industry, in response to the current situation, emphasises the need for a more comprehensive LPG policy. Such a policy, they argue, should focus on providing affordable, high-quality and ample LPG to mitigate the impact on lower-income households during this inflationary period. Furthermore, the surge in the use of LPG cylinders, particularly in winter, highlights the urgency of addressing the shortage in supply of piped gas. As consumers turn to alternative sources, the strain on the LPG supply chain becomes more apparent. Without adequate infrastructure improvements of LPG cylinders, there are risks of leaks and potential unforeseen accidents that could lead to the loss of innocent lives. Compounding the issue is the escalating natural gas crisis nationwide. Currently, the daily production of LPG stands at 2,000 metric tons, falling significantly short of the local consumption, which has surged to over 5,000 tons. This disparity has led to an increased reliance on imported LPG, covering up to 60% of the domestic demand.
These challenges can be attributed to unfavourable policies and high taxes that have negatively affected both producers and distributors. Calls for making LPG tax-free and the abolishment of unnecessary taxes resonate within the industry as they grapple with the economic implications of the current pricing structure. Striking a balance between fair pricing and sustainable production practices is essential to ensure the availability and affordability of LPG, especially for those most vulnerable to economic fluctuations.
Published in The Express Tribune, January 3rd, 2024.
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