Govt increases LPG price by around Rs12 per kg

Owing to an increase in the prices of Propane and Butane by Saudi Aramco, Pakistan, being an importer, on Thursday also increased the Liquefied Petroleum Gas (LPG) prices by Rs11.8 per kilogram for domestic and commercial consumers for December 2022.

With the increase in prices, the domestic gas cylinder weighing 11.8 kilograms will now cost Rs2,548, and commercial cylinder (45.4kg) at Rs9,804. After the increase of nearly 12 rupees, a kilogram of LPG will be available at Rs216. LPG is being used for cooking purposes in areas where piped natural gas is not available.

Saudi Arabia’s major oil and gas producer Aramco has increased the Propane and Butane contract price to Asia for December 2022 by $40/tonne to $650/tonne each. In November 2022, Propane and Butane price was the same at $610/tonne each. Propane and Butane are two major components of LPG, which the Middle Eastern oil producers sell to Asian countries. In Pakistan, LPG applicable prices are calculated on a 40:60 ratio of Propane to Butane.

According to the Oil and Gas Regulatory Authority (OGRA) notification, the price of a domestic cylinder has gone up by Rs139 while the price of a commercial cylinder increased by Rs535. In November 2022, LPG was available at Rs204/kg and domestic cylinder at Rs2,409 while commercial cylinder was available at Rs9,269.

Meanwhile, Chairman LPG Industries Association Irfan Khokhar said the country was already facing a gas shortage. He said the government’s “insane policies” coupled with a high number of taxes have put a negative impact on the LPG industry. LPG distributors have been paying over Rs6 billion per annum under the head of taxes. The government should waive off taxes to ensure provision of cheaper LPG to consumers during the winter season, said Irfan Khokhar.

He suggested the government devise a comprehensive policy of LPG import to meet the shortfall of natural gas. Demanding the government to restart the operation of LPG production plant of Jamshoro Joint Venture Limited (JJVL) in order to ensure supply of cheaper LPG on sustainable basis, Irfan Khokhar said that the closure of JJVL Jamshoro plant has incurred a loss of billions of rupees, in addition to a hike in LPG prices.

He also said the government should introduce stringent legislation against the sale and purchase of substandard LPG cylinders and it should also take strict action against the manufacturer of substandard LPG cylinders. There are several factories in Gujranwala that are manufacturing poor-quality LPG cylinders.

The government should also lift a ban on LPG use in vehicles, which will lower public transport fares, said the chairman LPG Industries Association.

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