ISLAMABAD

As the winter is becoming cold the prices of the liquefied petroleum gas known as poor man’s fuel is soaring with every passing day undermining all the government efforts to subsidies fuel and electricity prices.

LPG prices have been increased umpteenth time during last month and presently the LPG is sold up to Rs 160-180 per kilogram in retail re-gasification shops in different parts of the country.  The ex-distribution price of 11.8 kg cylinder was 1650, in Lahore, whereas in retail market it was sold between 1750 to Rs. 1800, while in Rawalpindi it was sold between Rs. 1800-1900. In Karachi its price was around Rs. 1700. For customers of small quantity who buy less than 11.8 kg the rate was up to Rs. 180 per kg. The prices have been plunged from Rs 130 per kg. This increase was like a bombshell on middle class and lower class strata, already under severe stress due to high inflation and shrinking job resources.

The recent increase is terrifying, now I would have to spend around Rs3500 on just gas out of my Rs10,000 take home salary, after spending so much on cooking fuel, how would I feed my family or spend on my children’s education, said Sardar Hameed, a resident of Sanjalian, a locality near Bhara Kahu, a suburb of Capital. Monthly gas consumption of a small family for cooking is around 12 kg per month, this usage doubles in winters when gas is also used for heating purpose also. This is not a plight of one family which is not linked to the national gas pipeline supply but in winters when natural gas supply become scares those who are having natural gas connections also become dependent on LPG due to its convenience and availability. But with the abrupt increase in the prices of this alternate fuel is becoming out of reach of the most of the general public of the country living on the verge of poverty.

According to United Nations Human Development Report 2014, Pakistan’s 45.6 percent population lives below the poverty line in accordance with Multidimensional Poverty Indices (MPI). it is pertinent to mention that if natural gas is supplied uninterrupted in winters the bill for a small family having one stove and usually an SNGPL household, with one stove and small heater receives a bill around 1000-1500 if gas is supplied. But the gas availability is becoming scares due to generous policy of granting new connections and depleting supply, according to Ministry of Petroleum statistics the demand of Punjab province in winter alone plunge to total production of natural gas in the country. Due to this non-availability of gas the general public has no option but to rely on LPG, conveniently available throughout the country.In order to provide relief to general public from swelling inflation government has recently reduced petroleum and electricity prices, but this relief has hardly made any affect on their budgets as now they have to spend on expensive LPG.

The prices of LPG, are kept below petrol prices. According to Ministry of Petroleum officials who have been working out LNG prices believe that according to international market trends the LPG or LNG prices should be at least 25 percent lesser than petrol prices.

The price of petrol has been reduced to around Rs 85 per liter. Why the rate of LPG keeps on swelling in local market, when in international market not only petrol but LPG prices have also been nose diving. Is it due to the increasing demand in winter that LPG prices shoot up.

Back ground interviews in petroleum sector revealed that LPG supply was sufficient but a powerful mafia has been exploiting the situation.

LPG has been under the grip of powerful mafia, seven years before when it was regulated, powerful people like former governor Punjab Khalid Maqbool, generals and other influential people got the quota illegally, this quota system was abolished on the intervention of Supreme Court in 2007, the LPG prices were deregulated but the powerful mafia managed to link the prices of this local commodity to international market (Suadi Aramco), said Chairman, LPG Distributors Association Pakistan Irfan Khokar. He said that LPG marketing companies were so powerful that government was helpless.

According to OGDCL prices, the current base price of LPG was 60,000 per metric ton, after including the 17 percent tax and Rs 26 per kg, distributor profit and other expense, the per kg costs become Rs 95 per kg, but the companies were selling at almost double price, Khokar said.

He said that the marketing companies has looted Rs 450 billion from poor public, by over charging since 2007 but despite proves neither Ministry of Petroleum nor OGRA were able to bring them under law.

If someone says the marketing companies are not looting people without the connivance of Ministry of Petroleum or OGRA or CCP, why despite all proves government has not cancelled licence of any marketing company, Khokar substantiated his allegations.

Ministry of petroleum held previous governments responsible for the situation, who, according to them, maliciously de regulated LPG sector.

We are aware of the situation and we have suggested to regulate the sector and fix the per kg price by around Rs. 95, said Minister for Petroleum and Natural Resources Khaqan Abbasi.

He said after the approval from ECC, his department was all set to present the proposal in coming CCI meeting, for final approval.

The prices matter is no more falls in federal domain, we have worked out the prices and now the matter is to be submitted in the next meeting of council of common interest, Abbasi told the scribe.

The experts believe that by sending the price issue to CCI, in fact the government wants to give marketing companies an opportunity to fleece public for another season, as KPK was expected not to attend upcoming meetings due to differences with federal government.