ISLAMABAD-The federal government has allowed private sector to install LPG air-mix plants, aiming to ensure supply of gas to consumers in selected areas where natural gas is not available and reducing the burden on the national kitty. 
The private sector will be free to set up LPG air-mix plants on commercial considerations at their own costs and liabilities subject to meeting OGRA’s licensing and operational requirements, said policy guidelines issued by the federal government for private sector LPG air-mix plants. The policy guidelines approved by the federal government, for installation of LPG air-mix plants (AMP) by private sector, are in pursuance of Clause 3.4.4 of LPG (Production & Distribution) Policy, 2016 and under Section 21 of OGRA Ordinance, 2002, said the policy guidelines.
The LPG supply preference or dedication mentioned in clause 3.1.I and 3.6.7 of LPG Policy 2016 will not be applicable on LPG AMP developed by private sector. However, LPG AMP may be entitled to purchase LPG in bulk at producer’s price notified by OGRA, from time to time. Tariff for LPG AMP, developed and operated by private sector, will be deregulated. 
The status of LPG-Air Mix Plant Licensee shall be the same as that of LPG storage, filling and distribution plant and that they shall also be entitled to import LPG governed by the prevalent Trade Policy and any other applicable policies/ law/ rule or instructions/ directives of the federal government.
The LPG AMP licensee/developer/owner of society shall not prohibit the consumers/suppliers for switching to alternate competing fuels supplied by any third party (be it of piped natural gas or LPG cylinders, another LPG Air mix Plants, Virtual LNG project etc.). The LPG AMP licensee of such plant will notify monthly tariff for information of consumers and also submit detail of monthly tariff to OGRA latest by 10th of every month. OGRA will ensure that the LPG AMP licensee may not take any measures to prevent marketing of LPG cylinders in the area where LPG Air Mix is supplied. The complaints resolution in respect of the pipeline network for the distribution of LPG and its metering to the households shall be done by OGRA as being done in natural gas sector. OGRA, being a regulator of LPG sector, is advised to comply with above mentioned policy guidelines under intimation to this division.
It is worth to mention here that the federal government already started an initiative to install LPG AMP through public sector companies. However due to involvement huge cost and subsidies the process of LPG AMP under public sector is very slow. The two gas companies Sui Northern Gas Pipeline Limited (SNGPL) and Sui Southern Gas Company Limited (SSGCL) have been tasked to set up 30 liquefied petroleum gas (LPG) air mix plants to cater to domestic gas needs. The Sui Northern Gas Pipeline Limited (SNGPL) and Sui Southern Gas Company Limited (SSGCL) have sought Rs 22.52 billion in cross-subsidy for LPG air mix supply to consumers in selected areas. The policy of allowing private sector is aimed at providing gas facility, to the population in the areas where it is not available. At air-mix plant, the LPG will be mixed with air to produce synthetic gas for onward supply through distribution networks like natural gas.