LPG Companies looting consumers thru upto 209pc higher marketing, transportation cost

The consumers of liquefied petroleum gas (LPG) are paying up to 209pc higher marketing/ dealer margins and transportation cost on petroleum gas, as compared to petrol and high speed diesel (HSD), which makes the prices of the cylinder gas 30pc expensive in Pakistan than the neighbouring India. For the month of January 2022, the prices of LPG per KG in India is Rs 151/Kg (Rs 63/Kg in Indian Rupee), while in Pakistan it is Rs 197/Kg, which is almost 30pc higher than India, official sources told The Nation here Sunday.

Pakistani LPG marketing companies, dealers are making huge money in margin on the gas called the fuel of the poor people. To get the exact comparison of margin on LPG, petrol and HSD, the units have been converted into mmbtu from ton.

The marketing/distribution and transportation margin on LPG is 203pc higher than petrol and 209pc higher than HSD, which makes the LPG expensive for the poor end consumers. Marketing/distribution and transportation margin on per mmbtu of liquefied petroleum gas (LPG) is Rs 772/mmbtu (Rs 3500/ton), while on petrol, it is Rs 255/mmbtu (Rs 11429/ton) and HSD Rs 250/mmbtu (Rs 11005/ton).

The per mmbtu marketing margin on LPG is Rs 375/mmbtu (Rs 17000/ton), which is 317pc higher than petrol which is Rs 90/mmbtu (Rs4036/ton), and 363pc higher as compared to HSD which is Rs 81/mmbtu (Rs 3529/ton). On LPG, the dealer/distribution margin is Rs 221/mmbtu (Rs10000/ton) which is 48.32pc higher than petrol Rs 149/mmbtu (Rs6659/ton) and 97pc higher than HSD which is Rs 112/mmbtu.

The transportation cost on LPG is Rs 176/mmbtu (Rs 8000/ton) which is 1000pc higher than petrol which is Rs 16/mmbtu (Rs734/ton) and 209pc higher than HSD which is Rs 57/mmbtu (Rs2521/ton).

There are hundreds of marketing companies and more than thousands of distribution companies which are making undue money by getting the highest margin in the country’s petroleum sector. Most of the companies involve in distribution/marketing business belong to the influential class of the country that is why nobody dares to ask about the abnormal high margins on LPG.

LPG is being used by the consumers where piped natural gas is not available and it is being considered the fuel of the poor. Due to depletion in the natural gas reserves in the country, more people in future will be compelled to switch over to LPG and with such a huge margin a lot of people will not be able to afford it, the source claimed. To ensure the availability of cheaper LPG, the government should reduce the marketing & distributor margin on LPG by half. Similarly the transportation margin should also be curtailed, the source added.

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