LPG price rises Rs19 per kg

Retail rate goes up as OGDC increases price by Rs18,836 per ton.

ISLAMABAD: Retail price of liquefied petroleum gas (LPG) has gone up by almost Rs19 per kg following an increase in rates announced by state-owned producer Oil and Gas Development Company (OGDC), people associated with LPG marketing say.

The price hike, which came into effect on Monday, comes just three days after a massive increase in prices of petroleum products and compressed natural gas (CNG) by the government from September 1.

The increase in LPG price has been attributed to the Saudi Aramco contract price with which the domestic market is linked. OGDC’s new LPG rate was Rs103,940 per ton.

“Local LPG prices have risen in tandem with the Saudi contract price, which rose by $171 per ton to $946,” said Belal Jabbar, spokesman for the LPG Association of Pakistan – a grouping of LPG marketing companies.

“The increase in Saudi Aramco price is primarily due to strong demand of LPG in Saudi Arabia, leaving little room for export. Stockpiling of LPG by China and other energy-hungry countries has also impacted the prices,” he said.

In Sindh and Balochistan, the retail price of LPG will now be Rs130 per kg, in Punjab Rs140 per kg and in Azad Jammu and Kashmir and northern areas Rs145 per kg.

The price of domestic cylinder (11.8kg) is expected to rise by Rs225 to Rs1,651 and that of commercial cylinder (45.4kg) by Rs855 to Rs6,303.

The government, which is the largest producer of LPG in the country, will be the direct beneficiary of the increase in prices.

Published in The Express Tribune, September 4^th, 2012.