Chairman Pakistan LPG Dealers Association, Hadi Khan, told The Express Tribune that “Parco was supplying between 450 and 500 tons of LPG per month to Punjab and parts of Khyber-Pakhtunkhwa.” This constituted a major chunk of LPG supply that stands around 700-800 tons in the two provinces, he explained.
Parco was shut down late last week because of rising flood waters in the vicinity of the refinery. The surge of water has also affected power supplies and disrupted road and rail networks in many parts of both provinces.
Hadi Khan also pointed out that “majority of the demand for LPG is also seen from these areas that are now affected by floods.”
Locals have reported that LPG dealers are charging as high as Rs100 a kg in parts of Punjab while even more exorbitant rates are being extracted from desperate consumers in parts of Khyber-Pakhtunkhwa.
The chairman of the LPG dealers association declined to confirm the rates being charged. “There is a breakdown of market mechanism and right now people with any kind of fuel to sell are trying to get as much out of customers as they possibly can.”
He added that prices of petrol, diesel and other fuels are also rocketing in flood-affected areas.
Experts have pointed out that re-starting a refinery is a time-consuming process. From the time operations are resumed, it may take as long as two weeks for Parco to reach previous levels of output and for these to be disseminated into markets.
Hadi Khan also pointed out that road and rail networks cannot be restored until flood waters recede. “At present, LPG is costing about Rs80,000 per ton to dealers doing business in southern Punjab,” he said explaining why they are charging higher prices from their customers.
Dealers say that once supply resumes from refineries in the northern region of the country, prices will start trending down. But at the moment profiteering is rampant and dealers are exploiting the lack of supplies by charging the highest possible rates they can get.
Published in The Express Tribune, August 12th, 2010.
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