LPG shortage feared in Ramazan

Importers cancel orders after price cap.

ISLAMABAD: The liquefied petroleum gas (LPG) industry has expressed fear that there will be a shortage of gas in Ramazan as importers have started cancelling LPG shipments following a cap on the import price below landed cost.

In this regard, LPG companies have also filed a petition in the Lahore High Court, seeking removal of the cap with the argument that LPG was a deregulated product. The next hearing is scheduled for July 17.

On July 5, Ogra set maximum consumer price of imported LPG at Rs96 per kg, including distributor margin of Rs6.

Industry officials argued that imported LPG cost companies Rs93 per kg, which was higher than Rs90 at which LPG companies were required to supply gas to the distributors.

“LPG imports, which are critical for Ramazan, may no longer be possible this year as the cost of imports stands higher than the set price,” said Belal Jabbar, spokesman for the LPG Association of Pakistan.

A company, which was scheduled to bring 2,500 tons on July 20, cancelled its order, the association said.

LPG imports, which normally account for 10% of the country’s demand, increase significantly in Ramazan, catering for 30% of the market.

Published in The Express Tribune, July 13^th, 2012.