LPG price raised by Rs10 a kg

December 01, 2017

ISLAMABAD - Price of liquefied petroleum gas (LPG) has been raised for second time in less than 15 day by the LPG mafia, by Rs10 per kg this time.

The fresh increase of Rs 10 per kg will result in increasing the price of domestic cylinder by Rs 100 while commercial cylinder rate will go up by Rs 400. After imposing a petroleum levy on locally-produced liquefied petroleum gas (LPG) at the rate of Rs4,669 per tonne, the government has decided to impose the same amount of regulatory duty on the imported commodity which has led to price increase of Rs 15 per kg in less than 15 days period. .

OGRA has several times asked the petroleum division to notify the LPG prices to end its black marketing and exploitation of the consumers as the LPG mafia has started increasing the prices of commodity unilaterally, official sources told The Nation. Due to delay by the government in notifying the prices, the LPG companies earlier this month unilaterally increased the prices of LPG by Rs 50 for domestic and Rs 200 for commercial cylinder. Official sources said that under LPG policy 2016 it is the government responsibility to notify the LPG prices while OGRA will implement it. Since the government didn’t notify the LPG prices therefore the regulator has no role to play, the official said.

According to a summary, available with this scribe, moved to the Ministry of Finance by the Petroleum division on November 2, 2017, secretary petroleum has proposed levying Rs 4669 regulatory duty on per MT of imported LPG . The summary further said that to meet the revenue collection target of Rs 2 billion set out as petroleum levy on LPG for FY 2017-18 by Finance Division, this ministry, as mandated by Petroleum Ordinance 1961, was in the process of imposition of levy on locally produced/extracted LPG at the rate of Rs 4669/per MT under the law wef November 1, 2017.

In this connection, LPG industry is of the view that levy may be imposed on the local production and imported LPG . As per Petroleum product Ordinance 1961 and LPG policy, 2016, levy can be imposed only on local production of LPG . The imposition was reviewed in the meeting held in October 2017 under chairmanship of the minister in charge petroleum division, for imposition of levy on LPG production. It was inter alia decided to impose a regulatory duty on LPG import equivalent to levy proposed to be imposed on local production of LPG to provide level playing field to both producers and importers. Notification in respect of levy on LPG has been issued but regulatory duty is also required to be charged from 1st November, 2017, however this duty will be liable to change whenever there is corresponding change in petroleum levy. In view of above, it was proposed that regulatory duty on import of LPG corresponding to levy imposed on local produced/extracted LPG may be imposed wef November 1, 2017, the petroleum division proposed. The LPG importers also threatened to stop selling the LPG in local market unless the government withdraws the regulatory duty.

Chairman LPG Distributors Association called a meeting on December 9 to decide about the strike in case the government refused to withdraw the duty on imported LPG .

Chairman LPG Chamber of Pakistan & Chairman LPG Distributors Association Pakistan, Irfan Khokhar said that 2nd gift of winters has been delivered to poor people of Pakistan. LPG consumer prices have been hiked by Rs 10/kg, adding that more hike should be expected in coming days.

He said LPG mafia & SSGC are active to fail government’s four years efforts, to provide poor people with domestic cylinder at Rs 895, by implying levy tax on import of LPG . Out of the total consumption of 4500 MT almost half quantity is being imported to fill the demand supply gap. Only 30 out of 144 marketing companies have local LPG quota while the rest are depending on imported LPG .

He further said levy tax on local LPG was supposed to finish the difference between local & imported LPG which was supposed to reduce LPG consumer prices for poor consumers of LPG in Pakistan. He said that LPG industry will suffer huge losses due to this levy tax on LPG import & LPG consumer prices will hike to up to Rs300/kg. He said that LPG Distributors Association Pakistan’s meeting will decide about strike throughout the country to stop supply of LPG from Khyber to Karachi.

After the increase, the LPG would be sold at Rs120 per kg in Karachi, Lahore, Gujranwala, Faisalabad, Jhelum, Kasur, Sahiwal, Sialkot, Daska and Peshawar, and domestic cylinder would be available at Rs1390. In Multan, Bahawalpur, Dera Ghazi Khan, Dera Ismail Khan and Abbottabad, the commodity would be available at Rs130 per kg and domestic cylinder at Rs1510. The LPG would be sold at Rs140 per kg in Rahim Yar Khan, Sadiqabad, Hyderabad, Attock, Gujrat, Mirpur Azad Kashmir, Murree and Nathiya Gali, while the price of domestic cylinder would be Rs1630. In Rawalpindi, Islamabad, Muzaffarabad, Bagh, FATA, Kotli, Azad Kashmir, Tando Muhammad Khan, Tando Allah Yar, Mirpur Khas, Nawab Shah, Thattha, Dadu, Jamshoro and Shikarpur, the LPG per kg price would be Rs145 and domestic cylinder Rs1,690. The per kg LPG price would be Rs170 in Balakot, Gilgit-Baltistan, Hunza and Skardu, and domestic cylinder Rs1990.