Islamabad - The government has banned the import of Iranian LPG stoking fears that the price of liquefied gas, which is already on an upward trend, will rise further.

The import of Iranian Liquefied Petroleum Gas (LPG) was banned after the US embassy here asked Pakistan to ensure compliance with US sanctions against Tehran, calling it “an issue of mutual interest of both governments”.

The LPG marketing companies have already unilaterally increased the prices of LPG in the local market o8n the excuse of hike in Saudi Aramco LPG price.

The price of LPG went up by Rs140 per cylinder in October in the local market and is likely to hike further after the ban on Iranian LPG, LPG Distributors Association chairman Irfan Khokhar told The Nation.

Oil and Gas Regulatory Authority (Ogra), through a letter, forwarded the US embassy note to all the marketing companies and LPG terminals, asking them to comply with US sanctions against Iran and be careful in the import gas of Iranian origin.

Quoting US embassy, the Ogra letter read, “USA has robust sanctions regime targeting IPS (Iranian Petrochemical Sector). However, the potential buyer of Iranian LPG in Pakistan may not be aware of these sanctions, or (they) need to exercise greater due diligence regarding the origin of products.”

“Since violation of above sanctions is an issue of mutual interest of both governments, therefore, the historical purchases of Iranian LPG in Pakistan may be informed about these sanctions risks and need to carry out due diligence,” the letter added.

Ogra asked LPG companies for strict compliance of the US sanctions.

The price of Saudi Aramco has increased by $75 per Metric Ton, from $355 per MT to $430 per MT.

Resultantly, the local marketing companies have jacked up the price by Rs12 per kg for domestic consumers which has increased the price of domestic cylinder of 11.8 kg by Rs140. The new price of LPG cylinder for domestic consumers is Rs1,468.

The price of commercial LPG cylinder has increased to Rs5,675.

Usually, Ogra notifies LPG prices on first date of every month, but the LPG marketing companies have increased the prices in local market prior the regulator’s notification.

“After the closure of Taftan border, LPG prices are likely to surge abnormally in coming months,” said LPG Distributors Association Chairman Irfan Khokhar. He added that a major portion of LPG import was coming from Iraq and Iran through the Iranian border.

This year the import of LPG from Iran was around 15,000 MT or around 500 MT per day. The import through ships via Karachi port was minimum in recent months as it cost 35 percent more than Iranian LPG.

The government should take steps to minimise the impact of the ban on the Iranian LPG on the consumers as it is going to take the prices of the commodity too high.