Energy requirement: 6,600 tons of LPG imported in October

Same quantity expected this month as well to meet high winter demand.

ISLAMABAD:

Liquefied petroleum gas (LPG) marketing companies working under the private sector imported 6,600 tons of LPG in October and are expected to import the same quantity this month as well to cater to the high seasonal demand, the LPG Association of Pakistan says.

“Imports are being made to ensure supply of LPG throughout the country in winter, when demand is comparatively higher,” said a spokesman for the association in a statement. “Availability of gas will help maintain price stability.”

He said LPG supply was adequate in the market and shipments were coming this month to prevent any shortage of the commodity. In addition to domestic production of about 1,200 tons per day, around 4,300 tons of imported LPG is stored at the Engro Vopak Terminal at Port Qasim, Karachi.

He praised the Lahore High Court for suspending the LPG Policy 2011, without which “the situation would have been dire and consumers would have suffered from high retail prices and acute product shortages.”

He said petroleum development levy on LPG production would have increased prices by at least 25 per cent or Rs20 per kg.

The new policy grants monopoly rights over new LPG production to the public sector companies, imposes petroleum development levy on producers to make a private sector LPG marketing company recently acquired by Sui Southern Gas Company viable and forces LPG marketing companies to import at least 20 per cent of their supplies.

Average annual LPG imports stand at 80,000 tons, but under the new policy they will increase five per cent to 84,000 tons.

To ward off legal challenges, the petroleum ministry has drafted a money bill which will allow it to slap the petroleum levy on LPG production.

According to the association’s spokesman, the levy will shrink the market and reduce government revenues.

The LPG industry was deregulated in 2000, leading to investments of over $300 million since then. The gas is being produced by 10 companies while marketing companies number around 80 in both public and private sectors.

Published in The Express Tribune, November 2^nd, 2011.