LAHORE LPG prices across the country have been increased by at least 16 per cent or by Rs. 13 per kilogram 'in order to ensure compliance with the latest directives from the Oil and Gas Regulatory Authority (OGRA). A statement issued by the LPG Association of Pakistan (LPGAP) on Tuesday stated that the OGRA has, through notification no. OGRA-LPG-17(242)/11 dated Sept. 19, informed Pakistans 11 LPG producers that the 'controversial petroleum development levy intended to facilitate imports and financially shore up Progas Pakistan Limited, a bankrupt LPG importing company facing litigation, has to be implemented positively by Sept. 21st, failing which strict punitive action shall be taken against non-compliant producers. 'The OGRA notification cited the disputed new LPG Production and Distribution Policy 2011 stating that it has determined the 'maximum base-stock price of LPG (FOB Saudi Aramco Contract Price plus marine freight and import incidentals) at Rs. 83,973 per metric ton. 'In addition, reads the notification, 'OGRA has also determined [PDL] as Rs. 11,485/MT. Based on the Saudi Aramco Contract Price for September, local LPG producer prices had been averaging at about Rs. 72,400/MT this month. The LPGAP added: 'this forced LPG producer price increase would be passed on to nationwide LPG consumers, and flies in the face of the Ministry of Petroleum and Natural Resources spurious claims that the PDL would make product cheaper. Criticising the government, the LPGAP said that on Sept. 17, the Ministry issued a defensive Press statement rejecting the objections raised by LPG marketing companies and distributors and claimed that the mere announcement of the new LPG policy by the government had led to LPG prices dropping by Rs. 56 per 11.8kg cylinder. 'The Ministry also claimed that the ultimate benefit of the new policy would go to LPG consumers, however, the nationwide consumers of LPG would now benefit from higher prices. 'Ministrys willingness to violate LPG rules and the law is alarming, said Belal Jabbar, spokesman of the LPGAP. 'Under the old and new LPG policies, LPG producer prices have to remain fixed for at least 30 days, OGRAs notification directing LPG producers to increase their prices violates the policy framework, he said. 'One of the stated objectives of the new policy is to decrease consumer prices. How then does forcing an increase of 16 per cent for made-in-Pakistan product not contradict that objective? Jabbar said the policy was illegal, unjustified, and stridently hostile to end-consumers. All Pakistan LPG Distributors Association also criticised the LPG Policy. Association Senior Vice-chairmen Ali Haider said: 'the statements emanating from the Ministry clearly demonstrate that its officials have no idea what theyre talking about. It was claimed that the Ministry had considered imposing a PDL on local LPG production in 2008, but shelved the proposal after it became apparent that it would burden consumers extraordinarily. The LPG bodies maintained the proposal was rolled out again this May after Dr. Asim Hussain was restored as Federal Minister and stated his intention to create a public sector monopoly in the LPG sector. 'His (Dr Asim) LPG Policy 2011, made in secrecy and without stakeholder inputs, is geared at rendering the private sector unviable. Local LPG producer prices have been linked with Saudi Arabian export prices since January 2007. The Saudi Aramco Contract Price, or Saudi CP, was $975 per metric ton during May, $897/MT in June, $839/MT in July, $865/MT in August, and $835/MT for September. Pakistans 11 LPG producers have adjusted their monthly prices accordingly. It was stated that the OGRA has directed Attock Refinery Limited (ARL), Ocean Pakistan Limited (OPI), National Refinery Limited (NRL), BP, Pakistan Refinery Limited (PRL), Pakistan Petroleum Limited (PPL), Jamshoro Joint Venture Limited (JJVL), Byco Petroleum Pakistan Limited, Pakistan Oilfields Limited (POL), Pak-Arab Refinery Limited (PARCO), and Oil and Gas Development Company Limited (OGDCL) to increase prices immediately. It is worth mentioning that the government of Pakistan, through its shareholdings including in PARCO and OGDCL, is the countrys largest producer of LPG. The PDL and the new LPG policy are likely to be challenged in court by LPG producers, marketing companies, and distributors. The LPG bodies also announced to stage a protest demonstration against the LPG policy at Lahore Press Club on Wednesday (today).