ISLAMABAD: A high-level committee tasked with operationalising the LPG auction framework decided on Saturday that state-owned companies would be allocated 10 per cent of locally produced LPG, while private bidders would be allowed to purchase a maximum of 20 tonnes per day through the auction.
The committee’s first meeting, held under the chairmanship of the secretary petroleum, with Federal Minister for Petroleum Ali Pervaiz Malik also in attendance, decided that under the new mechanism, indigenous LPG producers would allocate 10pc of their production to state-owned LPG marketing companies for supply to hard areas, while the remaining 90pc would be offered through transparent auctions held in the presence of the media.
The applicable rate for public sector companies would be the producer price, based on the CP rate (Saudi Aramco FOB price). The arrangement aims to improve access to LPG, particularly in remote and underserved areas, while ensuring wider market participation.
The first meeting marked a step towards operationalising the LPG auction framework approved by the federal cabinet on Nov 4. The committee is mandated to oversee auctions of indigenous LPG, review market supply arrangements and periodically assess pricing and bidding mechanisms.
PLMA dismisses auction plan as eyewash, says it is unlikely to ease supply crunch
The committee, chaired by the secretary petroleum, comprises the chairman of the Oil and Gas Regulatory Authority, managing directors of Oil and Gas Development Company Limited and Pakistan State Oil, the president of United Energy Pakistan Limited, and the director general (liquefied gases).
The meeting also decided that daily LPG production would be closely monitored and production figures presented to the prime minister to ensure effective oversight of the supply situation. The committee emphasised the government’s commitment to addressing public concerns about LPG availability and unfair pricing.
In a statement, Ali Pervaiz Malik said the restriction limiting each company participating in the auction to a maximum allocation of 20 tonnes per day was intended to provide a level playing field and fair opportunities to all participants.
Eyewash
However, LPG marketing companies termed the government’s move an eyewash, saying it was aimed at diverting attention from the real issue of a shortage caused by the closure of the Iran border.
The Pakistan LPG Marketers Association (PLMA) said the new committee was moving ahead in a directionless manner. Ali Haider, senior vice chairman of the association, said high prices were the result of black marketing, which was being fuelled by a shortage of supply.
“Our major needs are met through LPG coming from Iran and a crisis emerged after closure of the border,” he said.
Mr Haider added that local LPG production accounted for around 30pc of total consumption, meaning the 10pc allocation to the public sector would not even reach ordinary consumers. He said that of the country’s daily LPG consumption of around 7,000 tonnes, only 2,100 tonnes were produced locally. He said that 10pc of the local production would amount to just 210 tonnes per day.
“If the objective was to reduce prices on imported LPG, the best way would be to reduce the 19pc sales tax on imports to 10pc, exempt the 5.5pc withholding tax, waive terminal charges or reduce them by 50pc, lower port-related royalties and extend the permitted demurrage period,” he added.
The PLMA has urged the government to take these measures to ensure consumers receive gas at lower prices. Mr Haider said prices would actually rise following the bidding process, and companies with greater financial resources would eventually take control of the market.
Published in Dawn, November 8th, 2026
