The Oil and Gas Regulatory Authority (Ogra) has cut prices of liquefied petroleum gas (LPG) by a significant amount of Rs20 per kg in an attempt to provide relief to consumers, but it may lead to legal battle with the LPG marketing companies.
In a notification issued on Saturday, the regulator of the oil and gas industry set different prices for locally produced LPG, 100% imported LPG and mixed fuel with local and imported content.
Giving the reason for the move, an Ogra official told The Express Tribune the LPG marketing companies were overcharging the consumers by Rs20 per kg. “After evaluation, we slashed the price in order to facilitate the consumers,” he said.
However, the industry argues that according to the current policy LPG is a deregulated product and the regulator has no right to intervene in the market. Only market forces determine prices of LPG, say the industry players.
In a previous occasion when Ogra announced prices of LPG, marketing companies challenged the move and took the regulator to court.
“According to the rules, Ogra has powers to fix reasonable prices when LPG rates are excessively high,” the Ogra official said, adding the regulator had set reasonable prices.
According to the notification, the maximum consumer price for 100% locally produced LPG has been set at Rs125.16 per kg. An 11.8kg cylinder will cost Rs1,477.
For 100% imported LPG, the maximum consumer price is Rs139.32 per kg and Rs1,644 for 11.8kg cylinder. The price ceiling for mixed LPG is Rs125.33 per kg and Rs1,479 for 11.8kg cylinder.
Ogra has directed the marketing companies to ensure that their consumer prices do not exceed the fixed prices.
“In reference to the intermittent increase in sale prices of LPG, Ogra in exercise of powers conferred under Section 6(2)(q) of the Ogra Ordinance, Rule 18(2) of the LPG (Production & Distribution) Rules, 2001 and in pursuance of para 3.4.2 of LPG Policy 2006, has determined reasonable maximum consumer price of 11.8kg cylinder including distributor margin of Rs70 per cylinder for all urban and rural areas of the country,” said Ogra in the notification.
Owing to higher transport cost in Azad Jammu and Kashmir, Federally Administered Tribal Areas (FATA) and northern areas, Rs30 per 11.8kg cylinder would be added to the maximum consumer prices, it said.
Published in The Express Tribune, December 9th, 2012.
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Price shd such adjusted that they remain same in whole country. OGRA neeeds to give more focus on CNG/gas to generate cheaper elec and fertiliser