Domestically produced LPG to cost Rs6.6 per kg more

OGDC and PARCO have increased their base stock prices by up to Rs6,600 per ton.

ISLAMABAD: Domestic consumers of liquefied petroleum gas (LPG) may likely face a price hike of Rs6.6 per kilogramme (kg), after state-owned LPG producers, the Oil and Gas Development Company (OGDC) and Pak Arab Refinery (Parco), increased their base stock prices. The new prices of LPG will be effective from November 3.

OGDC and Parco have increased their respective LPG base stock prices by as much as Rs6,600 per ton. After the decision, the prices of domestic and commercial cylinders are expected to increase by Rs78 and Rs300 to Rs1,650 and Rs6,350 respectively, said Belal Jabbar, spokesman for the LPG Association of Pakistan, in a statement.

The price increase, which comes in response to the new higher Saudi Aramco Contract Price (CP) for November, is nonetheless lower than market anticipations. “For the third consecutive month in a row, LPG producers have been forced to maintain prices well below the Saudi Aramco CP as the international price benchmark has flirted with new highs” said Belal.

“The Supreme Court’s decision to reduce CNG prices has also had an adverse impact on demand for LPG as an automotive fuel, which has depressed its sale” he said.

OGDC has increased its price by Rs3,000 per ton to total Rs101,018 per ton, whereas Parco jacked up its price by Rs6,600 per ton to total Rs108,790 per ton. Together, the two state owned LPG producers account for nearly 45% of the country’s domestic LPG production.

Belal said that the increase in producer’s prices was expected to push up retail rates per kg to Rs130 in Sindh, Rs140 in Punjab and KP, Rs145 in AJK and Rs150 in Gilgit-Baltistan and the Northern Areas.

Published in The Express Tribune, November 3^rd, 2012.