OGRA raises LPG prices for December

Distributors and consumers decry price hikes, black marketing

ISLAMABAD:

The Oil and Gas Regulatory Authority (Ogra) has announced a marginal increase in Liquified Petroleum Gas (LPG) prices for December 2024, citing fluctuations in the exchange rate as a contributing factor. According to a statement issued by Ogra, the LPG producer price remains directly linked to the Saudi Aramco Contract Price (CP) and the prevailing US dollar exchange rate.

While the Saudi Aramco CP remained unchanged compared to the previous month, a slight uptick of 0.05% in the average dollar exchange rate resulted in a marginal increase in LPG consumer prices. The price hike translates to an additional Rs1.32 for an 11.8 kg domestic cylinder, marking a 0.04% rise. On a per-kilogram basis, the increase is Rs0.11.

With this adjustment, the producer price of an 11.8kg LPG cylinder for December 2024 has been set at Rs2,513.45, up from Rs2,512.13 in November. Similarly, the consumer price for the same cylinder now stands at Rs3,000.79, compared to Rs2,999.47 last month.

The LPG Distributors Association, in its statement, highlighted the adjustments in both domestic and commercial cylinder prices. The association noted that the price of a domestic cylinder has risen by Rs1.32, while the cost of a commercial cylinder has increased by Rs5.07. Additionally, the producer price per metric tonne of LPG has gone up by Rs112.16. As a result, LPG is now priced at Rs254.30 per kilogram, compared to Rs254.19 previously.

Irfan Khokhar, Chairman of the LPG Industries Association of Pakistan claimed that LPG is not being sold at the Ogra-notified prices at any plant across the country. He alleged that black marketing of LPG has been rampant for several months, with government authorities failing to take effective action.

"All government institutions remain silent while heavy fines are unjustly imposed on poor LPG shopkeepers," Khokhar said. He pointed out that LPG, often referred to as the "fuel of the poor," is essential for households to keep their stoves running. However, a mafia controlling LPG supplies continues to exploit consumers, inflating prices and draining billions of rupees from the pockets of ordinary citizens.

Khokhar further lamented that the price of LPG has risen beyond the purchasing power of many consumers, especially amidst the intensifying natural gas crisis. "In most parts of the country, even preparing a single meal a day has become a challenge," he added. He called for urgent government intervention to ensure LPG supplies from plants at regulated prices to alleviate the burden on the poor.

The demand for LPG, primarily used for cooking in remote and northern areas, has surged with the onset of winter. Natural gas supply shrinks during the colder months due to increased demand, leaving LPG as the only viable and relatively affordable alternative.

With 60% of local demand reliant on imports, the LPG market remains vulnerable to international price fluctuations.