Sky-high: LPG price hike expected

Despite fall in international prices, domestic rates may climb Rs8.8 a kg .

ISLAMABAD: Despite a fall in the international Saudi Aramco contract price, the price of Liquefied Petroleum Gas (LPG) is likely to jump by Rs8.8 per kilogramme (kg) as demand has accelerated.

LPG price in the international market has dipped from $861 to $731 per ton whereas local LPG prices are currently at $650 per ton.

Domestic LPG producer and retail prices fell drastically last month due to a pile up of stocks and are most likely expected to equal the new Saudi contract prices to match demand.

“Due to depletion of stocks and a reduction in production from the refining sector, the market is short supplied thus in imbalance” said LPG Association of Pakistan Spokesperson Belal Jabbar.

The new contact price inclusive of taxes works out to Rs78,535 per ton, whereas the current producer price is Rs69,698 inclusive of taxes. Prices may rise by as much as Rs8,800 per ton.

If the LPG prices do increase, prices of domestic and commercial cylinders are expected to follow from Rs1,240 to Rs1,340 and Rs4,767 to Rs5,167 respectively whereas retail prices are expected to be as follows in different parts of the country; Sindh Rs109, Punjab Rs114, K-P Rs118, Northern Areas and AJK Rs125 per kg.

Published in The Express Tribune, May 31^st, 2012.