ISLAMABAD: The government has decided to formulate a long-term liquefied petroleum gas (LPG) policy to restrict the extension in pipeline’s network and promote the use of LPG.
The production of gas in the country has been static over the past decade, resulting in shortages, especially in the winter season. “We cannot extend the existing pipeline network and are going to frame a long-term policy by promoting the use of LPG in all sectors,” said Special Assistant to Prime Minister on Petroleum Division Nadeem Babar while chairing a high-level meeting on Thursday.
The meeting was also attended by domestic LPG producers, marketing companies, importers and distributors.
Gas utilities – Sui Northern Gas Pipelines Limited (SNGPL) and Sui Southern Gas Company (SSGC) have been facing billions of rupees worth of losses due to extension in the pipeline network. The use of LPG will help control these losses.
During the meeting, Babar said the government would prepare a long-term policy to promote the use of LPG in the domestic sector. He said the existing tax regime for LPG would continue and no new tax would be imposed on the sector to encourage imports in order to meet domestic demand. He said the government would not restore regulatory duty on LPG import in an effort to encourage importers to meet the growing demand of gas in the domestic sector.
Local LPG producers, however, have been pressing the government to restore the regulatory duty on LPG import, believing it will discourage the gas import. However, it will also lead to a shortage of LPG and increase in prices of the product.
Following the elimination of regulatory duty on LPG import, the flow of import has increased, which has pushed down prices and made the commodity affordable for the poor. LPG Industry Association Pakistan Founder Chairman Irfan Khokhar briefed the meeting that LPG was a 65% cheaper fuel for the auto sector compared to petroleum products and 20% cheaper than compressed natural gas (CNG). “Its use in the auto sector will bring down the import bill,” he said.
The meeting was informed that over the past 10 months, LPG had been available at prices lower than those notified by the Oil and Gas Regulatory Authority (Ogra).
