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Country may face 60 percent LPG shortage after de-linking of prices

* LPG production stands at 1,650 tonnes per day while the demand is about 4,500 tonnes per day

By Zafar Bhutta

ISLAMABAD: The country may face a shortage of Liquefied Petroleum Gas (LPG) by 60 percent in near future after de-linking the LPG prices with international market, a senior official in Oil and Gas Regulatory Authority (OGRA) told Daily Times here on Saturday.

The official said that the LPG marketing companies involved in import of LGP have been discouraged after de-linking of LPG prices with international market as now local LPG producers have started creating monopoly and manipulate the prices in the country.

“How can the marketing companies sell LPG at lower prices after buying the product from international market at higher rates,” he questioned suggesting that the government should give 5 to 10 percent subsidy on the import of LPG like petrol, diesel and kerosene to maintain balance between supply and demand of LPG in the country.

The official said that LPG production stands at 1,650 tonnes per day while the demand is about over 4,500 tonnes per day and it is needed to encourage the import to have a balance between supply and demand of LPG in the country.

He also informed that the government has allowed the use of LPG in the auto sector from the LPG pumps and after this move, the LPG demand has increased by over 40 percent and in near future the use of LPG in auto sector would further increase by over 60 percent. LPG consumption increases in this winter is about 22,000 metric tonnes per day as against 18,000 metric tonnes per day in summer.

He said that after linking the prices of the LPG with international market, the growth of the LPG sector in Pakistan had witnessed. The number of companies has increased from 15 in the year 2000 to over 40. He added that after de-linking the prices, local LPG producers would exclude the marketing companies that would cause a shortage of LPG in the country in near future.

He said that after de-linking the LPG prices with international market, price determination mechanism has been disturbed and LPG producers are free to fix the prices. “However, they could not fix the prices of LPG exceeding price of LPG according to the Saudi Aramco control prices,” official said adding that two groups are disputing in the market over the issue of prices of LPG including the LPG producers and LPG marketing companies that want to fix the prices of LPG as per their own will.

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