The Saudi contract price, with which local LPG prices are linked, stood at $850 per ton for propane and $910 for butane in January. However, after tensions in the Middle East and Persian Gulf and rising oil prices, spot prices for both propane and butane have increased to $940 and $990 per ton respectively, say people associated with the industry.
The LPG price in Pakistan is calculated on a ratio of 40:60 for propane and butane. “The Saudi Aramco contract price will be announced on January 30, which will be the highest ever,” said Belal Jabbar, spokesman for the LPG Association of Pakistan.
The resultant increase in prices will translate into a rise of Rs106 for domestic cylinder and Rs408 for commercial cylinder. Retail price may jump to as high as Rs155 per kg while domestic and commercial cylinders will cost Rs1,650 to Rs1,756 and Rs6,350 to Rs6,758, respectively.
Industry people express fear that the levy will not be absorbed by the producers next month since the objective of the petroleum ministry has been to increase domestic prices.
A record quantity of 17,000 tons of LPG was imported in December. However, imports have dropped to 11,000 tons in January.
Published in The Express Tribune, January 27th, 2012.
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