Ogra’s LPG pricing mechanism draws criticism
LAHORE: Ogra’s notification to cap LPG consumer prices below the cost of imports has attracted sharp criticism of the LPG marketing companies that had planned imports to cater for shortages in the month of Ramazan.
The Oil and Gas Regulatory Authority fixed maximum consumer price for local and imported LPG at Rs83.3 and 96.27 per kilo or Rs983 and Rs1,136 per domestic cylinder. The price is inclusive of distributor margin of Rs70 per cylinder.
Approximately 40 LPG companies out of 91 operating in Pakistan rely on LPG imports for servicing their distributors and market demand. LPG imports which typically represent only 10 per cent of the country’s demand usually cater to up to 30 per cent demand in Ramazan.
LPG imports are currently available for Rs85,700 per ton at Port Qasim. The cost associated with transporting the product to Punjab and Northern Areas is between Rs7,000 and 10,000 per ton. The landed cost of imports is higher than the maximum consumer price mandated by Ogra.
“We are deeply disappointed that Ogra has chosen to fix prices without consulting stakeholders, especially companies that have already or were planning to import LPG to cater for Ramazan” said Bilal Jabbar, a spokesman for the LPG Association of Pakistan.
At least two importers have dropped plans for importing LPG because of Ogra move.