LPG price hike triggers countrywide protests

2018-08-29T01:27:04+05:00 Atif Khan

ISLAMABAD - Hundreds of rickshaw drivers held a series of protest demonstrations in the country against the rise in the prices of Liquefied Petroleum Gas (LPG).

The price has seen a phenomenal increase in recent days and jumped from Rs120 to Rs 180 per kg thus triggering the protest.

The protesters blocked main roads of the cities and blockade kept the vehicular traffic suspended for many hours. LPG, known as poor man's fuel is being sold above Rs150 per kg in Karachi, Rs180 in Lahore and twin cities while more than Rs210 in far flung and hilly areas.

The gas refuel shops were found charging up to Rs200 to fill one kg gas. The 11.8 kg domestic cylinder was being sold between Rs1800-2000.

The increase has burdened the already suppressed citizens. "First, petrol, then electricity and now the price of LPG has been doubled, it is criminal and inhuman, there must be no place for looters, fraudsters and mafias in new Pakistan, the PTI government should send the responsible behind the bars," said, Ghulam Anwer, a resident of Barakahu.

Due to unavailability of piped gas in many parts of the country and long hours of gas loadshedding where it is being supplied, LPG is only option for million of household users. During last four years, the sale of LPG jumped from 502,232 Metric Tonne (mt) to 1,176,496.47mt.

As per official data, Pakistan use more than 106691 metric ton LPG in one month. The domestic consumers use 45675 MT, commercial 46800 while industrial consumers sue 14217 MT per month. The daily consumption stands at 3442 MT. In June this year, a total of 60158 MT was produced locally while nine companies imported 12668 MT to meet the gap between demand and supply.

According to insiders, local companies in connivance with government departments and Oil and Gas Regulatory Authority have been creating an artificial shortage for increasing the prices to mint extra bucks from the trade.

Surprisingly the cylinder is being sold at Rs2000 and above whereas actual cost is only Rs869, including excise duty. The OGRA has fixed Rs1564.98 for 11.8 kg domestic August 2018.

As per notification the actual price of gas is only 869.50. The regulator has fixed Rs413 as marketing or distribution margin, and Rs55 and Rs227 are petroleum levy and general sales tax. The price of cylinder Rs869 also include excise duty of Rs 85 per metric tonne.

As per notification the above prices are maximum and applicable for the month of August 2018. The OGRA has been increasing LPG prices since last many months.  In April, the regulator fixed Rs1282 for domestic cylinder.

In May the prices were increased to Rs1352, whereas in June the prices were again increased to Rs1443, despite the fact that in summer months the gas consumption reduces to almost half.

LPG Distributors Association chairman blamed LPG producers for the price hike .

"LPG producers has been successful in selling local produced gas at the price of imported one, in sheer violation of previous government LPG policy 2016," said Irfan Khokhar.  He said last government promised providing domestic cylinder at a price of Rs895.

It is the highest price in the history of the country, Khokar said, demanding government to JJVL plant and fix the prices at Rs30,000 per metric tonne.

"The price is very high and public cannot buy gas at such a high price, we have no option but to discontinue gas supply from September 6th," the chairman threatened.

Today's crisis is a result of grand architect designed by former minister for petroleum and his team, mainly the chief architect additional secretary Arshad Mirza, (who was later promoted to petroleum secretary), a shortage of domestic gas was created, by long hours of loadshedding to domestic consumers and suspending import of LPG, an insider said.

He said in many parts of the country gas is supplied only for few hours, even in summer. OGRA has fixed price of 11.8 domestic cylinder for 1565, but it is sold more than Rs. 2000 in different parts of the country including some kilometers away from the regulators' headquarter, either they are incompetent or they are on payroll of lpg marketing companies, said an insider. He said most of the present top management are former employees of petroleum companies.

The OGRA administration said a mechanism is in place to control prices.

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