ISLAMABAD: Oil and Gas Regulatory Authority (Ogra) is examining the reasonability of Liquefied Petroleum Gas (LPG) market prices and will determine new rates for LPG in one week.
Ogra official said that examining the fresh LPG price proposed by the Ministry of Petroleum and have sought comments and records from stakeholders before notifying it.
Earlier this month they had communicated LPG price at Rs900 per 11.8 kg domestic cylinders proposed by the petroleum ministry, the Ogra member said. The Ogra official said that LPG market was still deregulated as rules were not amended but stressed that they set price in line with existing policy which allowed to determine reasonable price. However, the LPG association rejecting the ministry directives refused to sell LPG on Rs900 per cylinder.
In a letter to the LPG companies, written on February 6, Ogra said, “In pursuant of the order of the Lahore High Court, dated January 27, 2017, passed in writ petition No 113 of 2017 titled M/S Gold Gas Vs Pakistan Petroleum limited, etc you are hereby directed to strictly comply with the prices of LPG as determined by the Ministry of Petroleum and Natural Resources under the LPG policy 2016.”
The OGRA member said that the authority in order to assess the reasonability of local LPG prices proposed by Ogra on February 2, 2016 has required the audited accounts for last three years from the LPG producing companies. Accordingly, Ogra shall determine the reasonability of LPG prices proposed by Ogra.
It is pertinent to mention here that after the approval of LPG policy 2016, by Council of Common Interest (CCI), the Ministry of Petroleum and Natural Resources asked Ogra to determine the price of 11.8kg cylinder of LPG at Rs895 for domestic and commercial consumers. Ogra has refused to obey the decision saying that since the prices of LPG in the market was less than Rs700 per cylinder it would be injustice with the end consumer to fix such a high price.
The LPG prices were de-regularised in the year 2000 and since then the government has never intervened in the prices matter of the LPG business. In winter, the price of LPG goes out of the control of the poor consumers. Overall, the prices of LPG in winter season were ranging from Rs800 to Rs1,650 per 11.8kg cylinder in different parts of Pakistan. For example in November 2016, the LPG prices for 11.8kg cylinder have reached to Rs1,650 in Gilgit Baltistan, Rs1,450 in AJK, Rs1,350-Rs1,400 in some cities of Punjab and Rs1,300 in Khyber Pakhtunkhwa.
The issue of high LPG prices was recently resurfaced when Lahore High Court, last month, stayed an auction of approximately 400 metric tons of LPG. The counsel of the LPG marketing company in his argument, before the honourable court, alleged that the gas producers (PPL and others) had been making a lot of money by selling the gas on higher prices which would ultimately burden the end consumers.
Meanwhile, LPG Distributor Association Pakistan Chairman Irfan Khokhar criticised the role of Ogra and warned that prices set by Ogra had led to cancelling orders of LPG imports that would cause another crisis of shortage of LPG supply in the country. He said that regulator had ignored the importers while setting the price and demanded the prime minister to dismantle the authority. He said that there would be no imports in coming months which would lead to another crisis.
He said that local LPG producers had also refused to accept the price notified by Ogra. He said that LPG imports stood at 62,117 metric tons in 2014 that jumped up to 1,164,706 metric tons in 2016 filling supply gap which resulted in stabilising prices.
