LPG marketers warn of supply crisis

Urge revision of LPG margins, immediate halt to plant sealing amid outdated pricing framework

LAHORE:

The Pakistan LPG Marketers Association (PLPGMA) has urged the federal government to immediately intervene to stop the sealing of licensed LPG plants, warning that continued enforcement actions could trigger supply disruptions, increase prices and adversely affect millions of consumers.

According to a statement issued on Friday, the association expressed serious concern over recent enforcement operations carried out by the Oil and Gas Regulatory Authority (OGRA) and other authorities in Lahore and other cities, where licensed LPG plants are reportedly being raided, harassed and sealed despite operating under valid licences. PLPGMA maintained these actions are disrupting legitimate businesses when the industry's core pricing issues remain unresolved.

PLPGMA stated the existing LPG pricing framework has become commercially unworkable as marketing and distribution margins have not been revised since 2018, despite significant increases in operational costs and supply chain expenses. The association also highlighted that locally produced and imported LPG continue to be regulated under a uniform pricing mechanism despite substantially different cost structures.

PLPGMA Chairman Ahsan Butt said the current enforcement campaign is addressing the consequences of an outdated pricing system rather than resolving its structural flaws.

"Instead of addressing weaknesses in the pricing framework, enforcement actions are disrupting legitimate businesses and weakening the LPG supply chain. Continued sealing of licensed plants will reduce market supply, increase pressure on consumers and contribute to price instability," he said.

PLPGMA emphasised that licensed operators should not be penalised for operating under an outdated regulatory framework and warned that any resulting shortages would be a direct consequence of policy shortcomings.

The association called upon the federal minister for petroleum to immediately halt the sealing of licensed plants, reopen facilities closed due to the pricing dispute, initiate an urgent revision of LPG margins, introduce separate pricing mechanisms for locally produced and imported LPG, and convene an immediate meeting with PLPGMA to develop a sustainable solution.

"The situation requires urgent and decisive intervention. Any further delay will disrupt supplies, harm consumers and further destabilise the LPG market," Butt concluded.