ISLAMABAD: Amid criticism from the industry, the Oil and Gas Regulatory Authority (Ogra) on Friday said it would come up with another “reasonable price” for liquefied petroleum gas (LPG) next week after completing its internal assessment and consultation process with stakeholders.

In a press conference, a team of Ogra led by its Member Finance Noor-ul-Haque and comprising executive directors for legal, finance and corporate affairs conceded that the regulator notified its previous LPG price in line with the existing LPG policy without making a fair analysis.

The notified price of Rs900 per cylinder of 11.8kg on February 8 sparked a controversy in the industry and tussle with the petroleum ministry. Through the notification, Ogra “directed” all 119 LPG marketing companies to “strictly comply” with a price determined by the Ministry of Petroleum and Natural Resources on June 8, 2016 at Rs900 per domestic cylinder of 11.8kg or Rs76,500 per tonne, including general sales tax. The retail price at the time ranged between Rs1,200 per cylinder in Lahore and Rs1,500 per cylinder in hilly areas like Azad Kashmir, Chitral and Gilgit-Baltistan. Ogra officials said the regulator had communicated the LPG price of Rs900 proposed by the petroleum ministry, but struggled to explain as to why the regulator did not notify a subsequent price proposed by the same ministry at Rs1,100 per cylinder.

“We are examining the fresh LPG price proposed by the petroleum ministry and have sought comments and records from stakeholders before notifying it,” said Mr Haque. Ogra Executive Director Misbah Yaqub said the LPG market was still deregulated as rules were not amended. But he stressed that the regulator had set the price in line with the existing policy, which allowed it to determine a reasonable price.

Responding to a question, both officials admitted that the no analysis was made to judge whether the Rs900 price was reasonable. The price of LPG communicated by Ogra was proposed by the petroleum ministry in a meeting of the Council of Common Interests (CCI) one year back.

But industry officials said that price was notified in last June when the import price was less than $300 per tonnes and had gone up to $555 per tonne since then.

At a separate press conference, LPG Distributors Association Pakistan Chairman Irfan Khokhar criticised the role of Ogra and warned that LPG prices set by the regulator had led to the cancellation of import orders that would cause a shortage of LPG in the days ahead.

He said the regulator ignored importers’ view while setting the price and demanded that the prime minister should abolish the authority altogether. He added that the regulator not only failed to play its role but also created confusion in the market. “Ogra has become a white elephant and should be abolished,” he said.

Mr Khokhar claimed that local LPG producers also rejected the price notified by Ogra. He said the rising LPG imports were leading to a price decline over the past two years, but the regulator shattered the trend.

Meanwhile, the All Pakistan LPG Dealers Association demanded that the government should review the price-fixing formula in the light of a hefty signature bonus charged by various LPG producers, including public-listed LPG producers, like OGDC, PPL and SSGC.

Published in Dawn, February 18th, 2017