LPG prices across Pakistan have been increased by at least 16 percent or by Rs 13 per kilogram in order to ensure compliance with the latest directive from the Oil and Gas Regulatory Authority.
According to the spokesperson of the LPG Association of Pakistan (LPGAP) Belal Jabbar the Oil and Gas Regulatory Authority (OGRA) has, through notification number OGRA-LPG-17 (242)/11 dated September 19, informed Pakistan's 11 LPG producers that the controversial petroleum development levy intended to facilitate imports and financially shore up Progas Pakistan Limited, a bankrupt LPG importing company facing litigation, has to be implemented positively by Wednesday, September 21, failing which "strict punitive action" shall be taken against non-compliant producers.
The OGRA notification cites the disputed new LPG Production and Distribution Policy 2011 and states that it has determined the "maximum base-stock price of LPG (FOB Saudi Aramco Contract Price plus marine freight and import incidentals)" at Rs 83,973 per metric ton. "In addition," reads the notification, "OGRA has also determined (PDL) as Rs 11,485/MT." Based on the Saudi Aramco Contract Price for September, local LPG producer prices had been averaging at about Rs 72,400/MT this month.
"The Ministry's willingness to violate LPG rules and the law is alarming," said Belal Jabbar. "Under the old and new LPG policies, LPG producer prices have to remain fixed for at least 30 days, OGRA's notification directing LPG producers to increase their prices violates the policy framework," he said. "One of the stated objectives of the new policy is to decrease consumer prices. How then does forcing an increase of 16 percent for made-in-Pakistan product not contradict that objective?" Jabbar said the policy is illegal, unjustified, and stridently hostile to end-consumers. This forced LPG producer price increase will be passed on to nation-wide LPG consumers, and flies in the face of the Ministry of Petroleum and Natural Resources' spurious claims that the PDL would make product "cheaper."
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