LPG marketing companies have reported a sharp reduction in their sales for the month of February. Sales have slowed down by as much as 30 percent due to the imposition of the petroleum levy. According to spokesman of LPG Association of Pakistan, Bilal Jabbar said that earlier in the month, state owned LPG producers that accounted for 70 percent of the country's production had increased their ex plant price by Rs 20,000 per ton after including the petroleum levy.
The levy has been imposed on local production in order to equate its price with imports. "The impact of the petroleum levy has lead to a sharp reduction in sales as LPG has lost its competitiveness to other fuels" said Bilal. LPG companies and consumers had challenged the Notification of the Petroleum Levy imposed on local LPG production in the Lahore High Court on the grounds that 'it is based on malafide, in as much as, in the garb of the said Notification protection is being extended to the importers of LPG by enhancing the price of the locally manufactured LPG'.
They had further contended that the impugned Petroleum levy was being imposed discriminately as the imported LPG is not being taxed. The Honourable Court admitted the petition and issued notices to the Secretary Petroleum and Deputy Attorney General to file their para-wise comments before the next date of hearing which has been fixed for February 27.
Bilal said that pressure was mounting on local LPG producers to reduce prices as companies were unable to lift their allotted quantity. At least one LPG producer has begun selling LPG to companies that are not its allottees in an effort to clear its stock.
The entire rationale of the levy, which was to somehow boost imports by increasing the price of local product, has been defeated. "There have been zero imports since the imposition of the levy. We urge the Government to immediately withdraw its notification and rescind the operation of the levy which will once again make LPG affordable" said Bilal.
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