LAHORE – The LPG marketing companies have reported a sharp reduction in their sales during the month of February. Sales have slowed down by 30 per cent due to the imposition of the petroleum levy, said the LPG Association of Pakistan on Tuesday.

Earlier in the month, State owned LPG producers that account for 70 per cent of the country’s production had increased their ex-plant price by Rs 20,000 per ton after including the petroleum levy. The levy has been imposed on local production in order to equate its price with imports.

“The impact of the petroleum levy has lead to a sharp reduction in sales as LPG has lost its competitiveness to other fuels” said Belal Jabbar, the spokesman for the LPGAP.

The LPG companies and consumers had challenged the petroleum levy in the Lahore High Court on the grounds that ‘it is based on malafide, inasmuch as, in the garb of the said notification protection is being extended to the importers of LPG by enhancing the price of the locally manufactured LPG’. They had further contended that the impugned petroleum levy is being imposed discriminately as the imported LPG is not being taxed. The Court admitted the petition and issued notices to the secretary petroleum and deputy attorney general to file their para wise comments before the next date of hearing which has been fixed for February 27.

The spokesman said pressure was mounting on local LPG producers to reduce prices as companies were unable to lift their allotted quantity. “At least one LPG producer has begun selling LPG to companies that are not its allottees in an effort to clear its stock.”