ISLAMABAD: The federal government has indicated it will resort to spot market purchases to meet surging winter LPG demand amid ongoing supply constraints, a move expected to push retail prices of LPG to Rs450–500 per kg.
Federal Petroleum Minister Ali Pervaiz Malik stated this in a joint press conference with Information Minister Attaullah Tarar here on Tuesday.
Ali Pervaiz said that with international spot market premiums currently standing at USD 300 to USD 400 per tonne over the Saudi Aramco Contract Price (CP), the fully loaded landed cost of imported LPG translates to estimated Rs450 to Rs500 per kg.
READ ALSO: OGRA increases LPG prices for November
He said that LPG will be provided to the public at a fair price: “However, it cannot be that if the price in the international market is Rs1,000, we can provide it locally for Rs500.”
The minister explained that OGRA notified the recent increase in LPG price because Aramco had announced the CP price of USD 756 per tonne, compared to USD 540 per tonne in March 2026.
Malik said the government was aware of public hardship and aware that winter would peak in December and January. “Even if the most expensive fuel has to be purchased for the piped network, we will bring it in and try to meet demand,” the minister said.
He also assured that efforts would be made to keep system gas available during the three daily mealtimes, noting that LPG would still be needed by consumers without pipeline connections and for other uses.
The minister noted that under the 2016 LPG policy, Oil and Gas Regulatory Authority (OGRA) was to decide the price for locally produced LPG based on the CP, or the Free On Board (FOB) price, notified by Aramco.
He said the situation had been fine since there were no import costs attached under this system. Now with the growth of economy, 70 percent of the need was met through imports and the FOB formula did not cover the import cost and people shifted towards the grey channel.
He said that Prime Minister Shehbaz Sharif had chaired a meeting on the issue earlier in the day and was personally leading efforts to rebuild the entire system, which he called the energy security architecture.
Under the new plan, he said LPG would be sold through competitive auctions in quantities of five and 10 tonnes, added that the government would also open LPG imports to competition to ensure better prices for consumers.
The government directed the state owned companies (Pakistan State Oil Company, SSGC LPG, and Pakistan LNG Limited) to book bulk deals on government-to-government (G2G) and business-to-business (B2B) bases, he maintained.
All importing companies will publish details of their monthly procurement costs, including Saudi Aramco’s contract price, premiums and freight charges, on their websites to ensure transparency, he said.
The current quota-based system for domestic produced LPG would also be replaced with a transparent auction mechanism. “Companies will offer the commodity in lots of five to ten tonnes, and auction results will be made public under the supervision of the relevant authorities,” he said.
Under the LPG policy, he said ten percent of the quota reserved for hard areas will be distributed transparently through state-owned companies in consultation with provincial government who would identify hard districts.
He said additional revenue generated through the new pricing and auction mechanism will be channelled into a Price Stabilisation Fund and a Vulnerable Protection Fund to provide subsidised LPG to deserving consumers through Benazir Income Support Program (BISP).
The minister said the Competition Commission has also been directed to prevent market manipulation and the formation of cartels, while OGRA would further improve transparency in its licensing and regulatory procedures.
Copyright Business Recorder, 2026
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