Locally-produced LPG: $120/ton PL to be imposed from 23rd

RECORDER REPORT

ISLAMABAD: The federal government is imposing $ 120 per ton Petroleum Levy (PL) on locally-produced Liquefied Petroleum Gas (LPG) with effect from January 23.

According to a notification issued here on Tuesday, the PL on locally produced LPG is expected to raise retail prices by at least 14 percent. While LPG marketing companies have decided to challenge the government's decision in the court of law.

Meanwhile, LPG distributors have welcomed the government decision to impose PL on LPG, saying that it would help break cartel of the LPG marketing companies. All Pakistan LPG Distributors Association Chairman Irfan Khokhar while talking to Business Recorder stated that the LPG marketing companies time and again increased the commodity price manifold without any check. He said these companies are mostly owned by influentials, who during past 6-7 years have earned over Rs 350 billion by overcharging the poor consumers, adding that the government decision to impose PL on LPG would help regulate the sector.

On the other hand LPG marketing companies rejecting the government decision said as a result of the government decision, LPG prices would increase at least by Rs 12 per kg.

Belal Jabbar, spokesman for the LPG Association of Pakistan (LPGAP) said, "This will have an adverse effect on everyday consumers and the industry." "We are disappointed that the government has chosen to disregard both the public interest as well as the orders of the honourable courts," he added.

Petroleum Levy on local LPG production was first imposed last September through the LPG Policy 2011. The policy, which was designed without stakeholder inputs and aimed at crowding out the private sector and establishing a public sector monopoly, was suspended by the Lahore High Court. The LPG industry maintains that the policy was crafted to secure the financial viability of the Progas LPG import facility, which was purchased last year by Sui Southern Gas Company Limited after a 'controversial' deal.