The decision was taken to ensure the protection of consumers and dissuade the formation of cartels.
According to the previous policy of the federal government, the price of LPG was determined by the market, but Ogra has been recently empowered to determine and impose a reasonable price. Ogra will also monitor LPG prices and reserves the power to intervene in the market.
This decision was taken when an unjustified price increase by LPG distributors/dealers and a few marketing companies was noticed by Ogra officials.
To ensure that cartels are not formed and consumer prices of LPG stay stable, Ogra has been empowered to determine the reasonability of price, while considering the import parity price of LPG, producer prices and audited accounts of LPG marketing companies for the last two years. Ogra also has the right to take strict punitive action against violators.
Ogra inspection teams have also been visiting markets in different cities to check consumer prices. Show cause notices have been issued to overcharging LPG marketing companies. Hefty fines may be imposed and licenses may be revoked against such companies.
Similarly, all provincial governments have been advised to ensure that no company or distributor is allowed to charge more than the price fixed by Ogra.
According to Ogra, the consumer price of locally produced LPG has been fixed at Rs944 per 11.8 kilogramme cylinder, price of imported LPG at Rs1121 per 11.8 kilogramme cylinder while the price for a mix of locally produced and imported LPG has been fixed at Rs976 per 11.8 kilogramme cylinder.
The prices are applicable for all the parts of the country except AJK, FATA & Gilgit-Baltistan where an additional Rs30 per 11.8 Kg cylinders is permissible due to higher transportation cost. Ogra will also ensure that producer prices do not exceed the Saudi Aramco contract price for LPG.
Published in The Express Tribune, August 28th, 2010.
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