ISLAMABAD   -   The Oil and Gas Regulatory Authority (OGRA) on Friday slashed the price of liquefied petroleum gas (LPG) by Rs3.86 per kilogramme for June 2024.

A press release/notification issued by Ogra said that the decision to reduce the LPG price was made following a decline in global prices.

Following the downward revision by OGRA, the price of an 11.8-kilogramme domestic cylinder will go down to Rs2,768.23 from Rs2813.85 for the month of May. While the commercial cylinder rate will decrease to Rs10,650. The new prices will be effective from today (Saturday).

It is to be noted that last month too, the government slashed LPG price by 4.74 percent or Rs11.88 per kilogramme for May 2024.

“The LPG producer price is linked with Saudi Aramco-CP and US dollar exchange rate. As compared to the previous month Saudi Aramco-CP has decreased by 2 percent. The average dollar exchange rate has also gone down by 0.04 percent resulting to decrease in LPG consumer price by Rs45.62/11.8 kg cylinder (1.62 percent). The per kg decrease in LPG consumer price is Rs3.86,” Ogra said.

The regulator determined the producer price of LPG, assuming a composition of 40 percent propane and 60 percent butane, to be Rs159,140 per tonne. This price includes an excise duty of Rs85 per tonne, excluding the petroleum levy of Rs4,669 per tonne. Consequently, the total cost for an 11.8 kg cylinder amounts to Rs1,878/11.8kg cylinder. Before the imposition of an 18 percent general sales tax (GST), the producer price would have been Rs163,810 per tonne, resulting in a price of Rs1,933/11.8kg cylinder. The GST on Rs159,140 per tonne would have been Rs29,486 per tonne or Rs348 per 11.8kg cylinder.

The OGRA has further calculated a maximum producer price of Rs193,295 per tonne or Rs2,281 per 11.8kg cylinder. The marketing, distribution, and transportation margins have been set at Rs35,000 per tonne, comprising a marketing margin of Rs17,000 per tonne, a distribution margin of Rs10,000 per tonne, and a transportation margin of Rs8,000 per tonne, resulting in a total margin of Rs413 per cylinder. Additionally, consumers are taxed with an 18 percent GST of Rs6,300 per tonne or Rs74.34 per 11.8kg cylinder, on the marketing and distribution margin of Rs35,000 per tonne.