Govt to auction 90% of indigenous LPG production under new mechanism

Pakistan will auction 90% of indigenous liquefied petroleum gas (LPG) production under a new allocation mechanism, the Petroleum Ministry said on Saturday, in a move aimed at promoting competitive bidding and improving transparency in the distribution of locally produced fuel.

The first meeting of the LPG committee under the approved deregulated framework was held under the chairmanship of the Secretary for Petroleum, with Federal Minister for Petroleum Ali Pervaiz Malik emphasising the government’s commitment to addressing public concerns regarding LPG availability and unfair prices, read a statement.

Under the new mechanism, indigenous LPG producers will allocate 10% of their production to state-owned LPG marketing companies for hard areas, while the remaining 90% will be offered through transparent auctions in media presence.

During the meeting, it was decided that a maximum allocation of 20 metric tons per day would be allowed to each company participating in the auction, providing a fair opportunity to all eligible bidders.

Govt hints at spot market purchase to ease LPG prices

It was further decided that daily LPG production would be closely monitored and the production figures would be presented to the Prime Minister to ensure effective oversight of the supply situation.

The minister said that the initiative was being undertaken in the public interest, particularly to address the difficulties faced by consumers who were unable to access LPG at affordable prices. He said the new auction mechanism would create greater resilience in the supply chain, strengthen energy infrastructure, ensure equitable distribution of indigenous LPG while protecting vulnerable segments at the same time.

The committee has been constituted under the chairmanship of Secretary Petroleum, with the Chairman, Oil and Gas Regulatory Authority (OGRA), Managing Director, Oil and Gas Development Company Limited (OGDCL), Managing Director, Pakistan State Oil (PSO), President, United Energy Pakistan Limited (UEP), and Director General (Liquefied Gases) as its members.

Ali Pervaiz underscored that the objective was to provide a level playing field and fair opportunities to all participating companies, while ensuring improved access to LPG for consumers.

The first meeting marks an important step towards operationalising the LPG auction framework approved by the Federal Cabinet on November 4, 2026. The committee is mandated to oversee auctions of indigenous LPG, review market supply arrangements and periodically assess pricing and bidding mechanisms.