ISLAMABAD: The government must do something about reducing liquefied petroleum gas (LPG) prices, especially for people deprived of piped gas supply, as higher prices are leading residents in many areas to cut down trees in their own backyards for firewood, stakeholders said on Tuesday.

They expressed concern that rampant felling of trees was observed not only in Balochistan but also in Murree, Galiyat, Khyber Pakhtunkhwa, Gilgit-Baltistan and even in Islamabad.

Speaking at a seminar titled ‘LPG, Once Termed Poor Man’s Fuel’, the sector experts slammed high taxes on LPG and urged the government to resume Jamshoro Joint Venture Limited (JJVL) LPG plant, which has not been functioning for several years, to meet the domestic gas demand.

Farooq Iftikhar, chairman of the Pakistan LPG Marketers Association (PLPGMA), said the daily local production of the fuel was 2,500 tonnes against 3,000 tonnes of imports, but somehow the local LPG cost more to marketing companies “due to a faulty pricing formula”.

Mr Iftikhar said Pakistan’s LPG pricing was linked to Saudi Aramco’s contract price, 17 per cent GST and the petroleum development levy (PDL) of Rs4,669 a tonne.

“The result is expensive LPG, which is inaccessible to poor citizens, mainly in rural areas and katchi abadis, who do not have piped gas supply from the SSGC or SNGPL at their homes,” he said, adding that such households existed even in Islamabad.

“So, what will these people do? They cut down trees, and this is on the rise,” he said. “The solution is to provide cheaper LPG,” he said.

Mr Iftikhar pointed out that the government was fetching Rs6.5 billion a year in PDL imposed on LPG, a figure he said was too small considering the direct and indirect losses resulting from cutting down trees and the high health risks associated with the use of smoke-emitting fuel.

He said the LPG had less than one per cent contribution to the country’s energy mix, and it could be made affordable for the people if GST and PDL were withdrawn.

“Countries like India and Bangladesh were promoting the use of LPG by giving subsidies to end-users, whereas in Pakistan, the faulty pricing formula has made LPG the most expensive fuel in the country,” Mr Iftikhar said.

Speaking through a video link, All Pakistan LPG Distributors’ Association’s Senior Vice Chairman Ali Haider said LPG was the only fuel that could be used for burning and utilised in vehicles.

“We see heavy trucks using LPG in various countries, and it can be supplied to mountain tops for usage by nomadic communities,” Mr Haider said.

“But Pakistan needs an updated and efficient LPG policy to cut down on diesel imports and reduce the environmental impact of daily cooking and heating through charcoal, wood, etc.”

He said LPG was currently selling for around Rs230 per kilogram and, therefore, expensive for poor residents of remote areas.

“The solution was to make the JJVL operational as soon as possible so that around 500 tonnes daily LPG comes online. It will help reduce the supply-side stress, whereas amending the pricing formula will help reduce its price too,” he said.

Published in Dawn, July 6th, 2022