LPG price dips Rs7 per kg as demand drops

Marketing firms say prices have come down 30% since Feb.

ISLAMABAD: The price of liquefied petroleum gas (LPG) has dropped by Rs7 per kg following reduction in rates by the producers, who took cue from the decline in Saudi Aramco contract price.

The producers slashed the base stock price from Rs78,000 per ton to Rs71,000 per ton, excluding taxes, on Thursday as demand was driven down by warmer weather.

According to a statement issued by the LPG Association of Pakistan, a grouping of marketing companies, they have responded immediately to the price revision and cut gas rates from Rs1,150 to Rs1,090 per domestic cylinder (11.8 kg) and from Rs4,425 to Rs4,195 per commercial cylinder (45.4 kg).

“The market has recorded a 30% decline in prices since February this year and the benefit has been passed on to the consumers,” said Belal Jabbar, the spokesman for the LPG Association.

Retail prices have come down from the high of Rs150 to below Rs100 per kg in all major cities of the country on the back of import overhang and lower demand because of the seasonal effect in the past three months. As a result, the marketing companies have been struggling to sell LPG at a time when competition is intense and they have been posting losses for the past several months.

Last month, the LPG producers were forced to break the link from the international benchmark and offer LPG at a discount to clear the stocks.

Published in The Express Tribune, May 4^th, 2013.

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