The Ministry of Petroleum has decided to move the Supreme Court against the decision of Lahore High Court on Monday which suspended specific clauses of the new LPG (Production and Distribution) Policy 2011 relating to imposition of petroleum levy on locally produced LPG.
The suspended policy made it mandatory for LPG companies to purchase 20 per cent of their supplies from LPG importers and brokers along with paying petroleum levy, a type of tax, on the product.
Different LPG companies challenged the policy in LHC through their counsel Shahid Hamid.
He said that 87 LPG companies had made investment totalling $1 billion in the market but the government with mala fide intention allowed marketing licences to public sector LPG companies. He termed the LPG Policy 2011 discriminatory for private LPG companies.
The petroleum minister had earlier confirmed that the new policy was aimed at establishing a public sector monopoly in the LPG sector.
Industry officials claim that suspended clauses of the new LPG policy were formulated by the ministry without any stakeholder input and gave monopoly rights to the public sector. Imposition of the levy would have meant a mandatory increase in LPG prices.
The latest court order follows the order passed by Justice Ejazul Ahsan on September 29 which barred the Oil and Gas Regulatory Authority (Ogra) and the petroleum ministry from taking any
action against LPG marketing companies along with
notifying prices.
“The decision will ensure that prices remain affordable for LPG consumers,” said LPG Association of Pakistan spokesperson Belal Jabbar. “LPG producers will once again be entitled to set their base-stock price as per market conditions without imposition of a forced levy,” he added.
The ministry has also repeatedly refused to meet with LPG producers or LPG marketing companies to discuss the policy.
“The policy is unjustified and unfair,” said All-Pakistan LPG Distributors Association spokesperson Ali Haider. This was an odd policy as it actually forced the industry to favour LPG importers and brokers, he said. “We request the ministry to rethink its approach and bring all stakeholders on board in the national and public interest,” he said.
Justice Mansoor Ali Shah also issued notices to the petroleum ministry and Ogra chairman and sought replies by October 5. Ogra’s counsel present in the court accepted the notice.
Published in The Express Tribune, October 4th, 2011.
COMMENTS
Comments are moderated and generally will be posted if they are on-topic and not abusive.
For more information, please see our Comments FAQ