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LAHORE: The retail prices of liquefied petroleum gas (LPG) are likely to touch Rs160 per kilo in the wake of a record increase in the Saudi Aramco Contract Price for March.
The Lahore High Court had on Feb 27 suspended the imposition of petroleum development levy, implemented last month on local production to forcefully equate its price with that of imports.
In a welcoming gesture, the LPG marketing companies immediately slashed their prices by Rs120 per 11.8-kg cylinder and retail prices fell to as low as Rs130 per kilo.
“The unexpected surge at $1,230 and $1,180 for Propane and Butane in Aramco Contract Price for March is attributed to continuing tensions in the Persian Gulf and a rising demand from Japan,” said LPG Association of Pakistan spokesman Belal Jabbar on Wednesday.
Representing a new record for the Saudi price benchmark, the March CP has increased by $182 per ton from that of February.
“Since LPG applicable prices in Pakistan are calculated on a 40:60 ratio of propane to butane that works out to $1210 per ton, the surge is likely to again increase LPG prices.”
The resultant increase in domestic and commercial cylinder prices would be from Rs1,532 to Rs1,880 and Rs5,902 to Rs7,264, respectively, in the event producers decide to match the new CP,” said the spokesman.
The Pakistan government is the largest producer of LPG, accounting for 65 per cent of the country’s production. In February, OGDCL commenced production of 130 tons per day from its Kunnar Pasaki Field, increasing the country’s daily output by 12 per cent to 1,150 tons. Although the additional production succeeded in displacing costlier imports which were zero in February, smuggled and under-invoiced LPG from Iran continued unabated.
