LPG sales: Court bars govt from giving preference to Sui companies

LHC suspends some clauses of LPG Policy 2013 until next hearing.

ISLAMABAD: The Lahore High Court on Friday restrained the federal government from giving preference to Sui gas companies in sales of liquefied petroleum gas (LPG) produced by public sector companies.

The court also barred the government from allowing LPG producers in Sindh and Balochistan to sell 7% of their production to companies having distribution network in Balochistan.

According to a statement issued by the LPG Association of Pakistan, the LHC, while hearing challenges to certain provisions of the LPG Policy 2013, stopped the federal government from taking any coercive measures pertaining to different clauses of the policy.

These provisions had been challenged by LPG marketing companies and an LPG producer.

Clause 3.3.1 of the LPG policy gives preference to Sui gas companies having LPG air-mix plants in allocation of LPG produced by public sector companies like Oil and Gas Development Company (OGDC), Pak Arab Refinery (Parco) and Pakistan Petroleum Limited (PPL).

According to LPG marketing companies, this, in effect, deprives existing 91 private sector marketing firms of access to domestic LPG production.



Another Clause 3.6(vi) holds LPG marketing companies responsible to ensure that their notified sale prices are charged by the distributors. The petitioners, however, argued that in the light of Clause 3.6(v), which asks the Oil and Gas Regulatory Authority (Ogra) to register distributors of LPG companies, effectively recognising them as individuals having a stake in the LPG chain, the companies should not be held responsible for the actions of the distributors.

The petitioners also challenged Clause 3.6(vii), saying it had been deliberately left vague to enable public sector LPG producers to provide some advantage for their favourite parties.

The petitioners argued that if the government was sincere about providing LPG to Balochistan, the clause should have made it mandatory to supply 7% of production to companies having storage and bottling infrastructure in the province as opposed to merely demonstrating a distribution network on paper.

Published in The Express Tribune, March 16^th, 2013.

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