LAHORE: LPG Association of Pakistan has rejected the price fixation formula of Oil & Gas Regulatory Authority (OGRA) and urged the Federal Minister for Petroleum & Natural Resources Shahid Khaqan Abbasi to take notice of the hardship caused to LPG Industry and withdraw OGRA notification at the earliest.
“OGRA has issued three letters in last 20-days regarding price fixation that does not comply with the needs of LPG industry & is bound to hit this important sector very hard. LPG producers have been directed to fix price Rs.45276/= per MT is nothing but to cause cash loss to the marketing companies”.
The demand was raised at a meeting presided over by the chairman LPG Association of Pakistan (LPGAP) Farooq Iftikhar where representatives of LPG industry using both local and imported LPG spoke of the ground realities and slammed. OGRA price capping will discourage imports which will lead to product shortage and thus black marketing of LPG.
They said that OGRA has shown scant knowledge about the facts and is taking decision without due consultation with the stakeholders. They said that sale price of the LPG producers is already high and they have huge profit margins, but OGRA has fixed consumer price only at Rs. 910/- inclusive all taxes and charges.
They said, that this step motherly treatment with LPG industry of Pakistan will close down their businesses and will cause social unrest as over million persons will loose their livelihood.
Chairman LPG Association of Pakistan Farooq Iftikhar said that LPG industry is a recognized sector and is providing bread and butter to the millions besides giving huge revenue the national exchequer.
He said that policy makers are talking about LNG but that will not change ground realities as piped gas is available to only 25% of the population.
He said that Liquefied Petroleum Gas (LPG) is a by-product of gas extraction and crude oil refining, is considered a clean and environmentally-friendly fuel, being made available as a cooking fuel to the poor to help improve &health of millions of people who currently use wood & other materials emitting harmful smoke and particles besides causing deforestation.
”A huge investment has been made in LPG sector of Pakistan by both the Private and public sector companies which needed to be protected by business friendly policies, but presently things are vice versa, and most of the LPG Marketing Companies will close because of unjustified prices fixed by OGRA”, Farooq Iftikhar added.
He demanded of the Federal Minister for Petroleum and Natural Resources Mr. Shahid Khaqan Abbasi to take notice of the situation and direct OGRA to withdraw the notification fixing prices
Immediately, otherwise Marketing Companies would close down and thousands of families would be deprived of their livelihood causing social unrest besides shortage and black marketing of LPG.
Furthermore, it may be noted that the size of the pie has grown considerably over the past 2/3 years with imported LPG constituting approximately 40% of the total LPG supply. This has been a positive development as more consumers in Pakistan have obtained access to an economical, portable, and environmentally friendly fuel, thereby improving the quality of their lives.
The current landed cost of imported LPG at Port Qasim is approximately Rs75,000/MT and transportation cost of Rs10,000/MT is incurred to bring it to the main demand centers in central and northern Pakistan.
This decision by OGRA will result in severe product shortages, black marketing, and overcharging, as importers have not planned any shipments for March.