KARACHI, Aug 16: Retailers have raised the rate of liquefied petroleum gas (LPG) to Rs85-86 per kg from Rs80-82 per kg following an increase in prices by marketing companies.

LPG price in January this year was only Rs55 per kg.

The federal finance secretary has, however, convened a meeting of all stake-holders on Monday for fixation of consumer price of compressed natural gas (CNG).

As marketing companies have increased the rate by Rs5 per kg, LPG prices would rise to Rs80 per kg in Lahore and up to Rs85-90 per kg in Peshawar and the Northern Areas, according to Irfan Khokhar, chairman of the Lahore-based LPG Distributors Association of Pakistan.

He said if the current trend of price-hike continues, LPG would be available at Rs110 per kg in Ramazan. He said that in the last four months, the government had increased the rate by Rs5 per kg only while the marketing companies had pushed up rate by Rs25 per kg in the same period. As LPG prices are increasing ahead of Ramazan, bakers may push up rates of various items.

Abdul Hadi Khan, chairman of Karachi-based LPG Distributors Association of Pakistan, told Dawn that the prices are under pressure because of demand and supply gap caused by low supply from production companies.

He added that some marketing companies had definitely pushed up rates. He said that the production of gas was currently 1,600 tons per day as against its demand of 1,800 tons.

After the opening of schools, the demand had increased as many school vans use gas.

To stabilise prices, the government should think of abolishing 16 per cent sales tax on LPG during Ramazan to provide some relief to consumers, he said.

He said that prices had also risen after a 10 per cent increase in rates made by the state-owned Pak Arab Refinery Limited on Aug 7 to Rs43,775 per ton while the Oil and Gas Development Corporation Limited (OGDCL) had made a similar increase in prices on Aug 3.

Secretary, LPG Association of Pakistan (LPGAP), a group of marketing companies, Fasih Ahmed, said that Oil and Gas Regulatory Authority (Ogra) had issued strict instructions on Aug 13 that consumer price of gas should remain at Rs68 per kg or Rs800 per 11.8 kg cylinder, but the LPG rate has now crossed Rs85 per kg.

He recalled that the members of LPG marketing companies in a joint meeting on July 23 had agreed that cylinder rate of marketing companies would hover between Rs700 and 710 per 11.8 kg cylinder. However, the rate of marketing companies now ranges between Rs750 and 850.

He said that all companies should abide by the Ogra prices. The association, he said, would support Ogra action against any member company. The association, he said, would take up the issue with its members on Monday.

CNG Dealers Association’s chairman Abdul Sami Khan said that he cannot say that CNG prices would come down after the meeting, as government wanted to regulate and fix lower prices at Rs40 per kg from the current rate of Rs47.25 per kg.