LAHORE – The Oil and Gas Development Company Limited (OGDCL) has commenced first significant production of Liquefied Petroleum Gas (LPG) in past seven years in the country.

It is being claimed that the additional LPG will add 12 per cent to the existing local production and will once again boost local production which had been on the decline.  The LPG Association of Pakistan (LPGAP) congratulated OGDCL on commencing production of 120 MT of LPG per day from its Kunnar Pasaki Field.

“This is the first significant production of LPG in the country in past seven years represents a major achievement for OGDCL” said Belal Jabbar, the spokesman of the LPGAP.

It is expected that the new production is likely to replace costlier imports and provide a relief to the national exchequer. “LPG prices hit a record high earlier this month due to the imposition of Petroleum Levy and an all time high Saudi Aramco Contract price with which local prices are indexed. The Petroleum Levy was enforced to equate the price of local production with imports in a bid to improve supplies of the latter,” said Belal.

The LPGAP spokesman added: “Faced with a lacklustre demand due to uncompetitivity high prices, marketing companies have begun to scale down their sale rates.

Demand pattern is also shifting due to change in weather and resumption of gas supplies to industries and households.” He denied that the reduction in price had anything to do with a strike call given by a ‘one man LPG distributor association.’

He said that the timing of the additional production was expected to create further pressure on prices and LPG producers were likely to reduce their rates in the coming days to ensure smooth off take.

“Local production which previously met 80 per cent of the country’s demand will now cater to approximately 90 per cent. There have been zero imports so far this month and we therefore request the Federal Government to seriously reconsider withdrawing the Petroleum Levy,” demanded Belal.