Ensuring regular supply of LPG to market: local allottees may be asked to import or buy

The government may request companies with local allocations of LPG to either import directly or purchase at least 20 percent from importers, on monthly basis, to ensure regular supply of LPG to the market.
Sources said that as per LPG production and distribution policy 2011, approved by the Economic Co-ordination (ECC) of the Cabinet recently, if the companies holding local allocations, failed to import or purchase in advance for three consecutive months, local allocation of LPG marketing companies will be cancelled by producers, on direction of the Oil and Gas Regulatory Authority (Ogra).
Under the new policy, to deter collusion in pricing, Ogra will determine the reasonableness of price, keeping in view the import parity price of LPG, producer price, and audited accounts of LPG marketing companies for previous two years.
The LPG producers shall set (base stock) price at par with C&F Karachi plus import incidentals to ensure uninterrupted LPG imports in terms of succeeding clause 3.4.2. However, the locally produced LPG will not be charged more than Saudi Aramco contract price (CP) and the differential between C&F and CP prices will be collected by the government as Petroleum Levy on LPG production.
Ogra will regularly monitor LPG prices and intervene in exceptional circumstances, if the consumer prices are considered not reasonable.
With a view to ensure adequate supplies of LPG in remote, rural and hilly areas of the country, and to halt deforestation, all LPG marketing companies with licensed LPG storage and filling plants in Punjab and KP will be obligated to supply at least 7 percent of their local LPG to Northern Areas, 7 percent to AJK and 6 percent to FATA. All LPG marketing companies with licensed LPG storage and filling plants in Sindh and Balochistan will be obligated to supply at least 10 percent of their local LPG in Balochistan province. The supplies to the areas specified above can also be arranged through swapping arrangements which shall be approved and strictly monitored by Ogra.
The regulator, Ogra, will develop an appropriate mechanism to monitor actual supplies to the above specified areas.
Ogra will initiate action against defaulting LPG marketing companies under the applicable rules and license conditions which, inter alia, may include revocation/cancellation of marketing licences. Ogra will also apprise the MPNR about the implementation status of this policy on quarterly basis.
The federal government may issue instructions to Ogra from time to time for implementation of this policy and/or in respect of matters related thereto, as may be considered necessary.