LPG prices more than double OGRA rate in Lahore and Peshawar

LAHORE:  Liquefied petroleum gas (LPG) prices have surged to between Rs600 and Rs650 per kilogramme in Lahore’s open market, more than double the official rate, amid a supply shortage and an increase in the price notified by the Oil and Gas Regulatory Authority (OGRA) for November.

OGRA has fixed the consumer price at Rs294.08 per kg, up by Rs14.73 from October. The price of an 11.8kg domestic cylinder has consequently increased by Rs173.86 to Rs3,470.09, compared with Rs3,296.23 last month.

In its notification, the regulator said the producer price had increased by Rs14,733.98 per tonne to Rs252,775.47, while the consumer price had been set at Rs294,075.47 per tonne. The new rates took effect on November 1.

OGRA attributed the increase to a 6.47 per cent rise in the Saudi Aramco contract price, a benchmark used to determine LPG rates.

The average dollar exchange rate declined by 0.12 per cent during the period, but the increase in the international benchmark pushed up the consumer price.

The sharp difference between the official and open-market rates comes amid a shortage of LPG supplies, which industry representatives say has been aggravated by disruption to imports from Iran.

LPG Distributors Association of Pakistan Chairman Irfan Khokhar said the supply situation was serious because of the closure of the Iran border.

He claimed that around 70 per cent of the country’s LPG supplies came from Iran, while the remaining 30 per cent was produced locally.

Khokhar urged the government to take serious measures to curb market manipulation and bring prices under control.

The supply constraints coincide with an expected seasonal increase in demand as winter approaches. Daily LPG consumption, which generally stands at around 4,000 to 4,500 tonnes, can rise to 6,000 to 7,000 tonnes during peak winter, according to industry estimates.

Meanwhile, LPG marketing companies have threatened to suspend operations nationwide from November 16 if the government proceeds with a proposed policy that they say would sideline the private sector.

Pakistan LPG Marketers Association Chairman Ali Haider has warned of a strike, saying the government should not reverse the deregulation of the LPG sector. He also attributed the shortage to disruption in supplies from Iran.

Haider said Pakistan imported around 225,000 tonnes of LPG from the Gulf out of total annual imports of approximately 1.3 million tonnes, with most of those shipments handled by the private sector.

He also questioned the role of state-owned entities in securing supplies, saying the ProGas terminal at Port Qasim was under the control of Sui Southern Gas Company, which had last imported LPG around seven months ago.

The marketers’ association has written to Petroleum Minister Ali Pervaiz Malik, claiming that the draft policy sent to the prime minister was prepared without consultation with the private sector. It has called for the continuation of a fully deregulated LPG market.

The association has also questioned the use of the petroleum development levy collected on locally produced LPG. Under the 2016 LPG policy, a levy of Rs4,669 per tonne was imposed to help state-owned companies, including Pakistan State Oil, Parco and Sui Southern Gas Company, import LPG during winter and emergencies.

Haider alleged that despite billions of rupees being collected through the levy, state-owned entities had failed to ensure supplies during the current shortage.

With open-market prices in Lahore reaching Rs650 per kg, consumers face mounting pressure as winter demand increases and uncertainty persists over imports and the government’s proposed LPG policy.

LPG sells for up to Rs620 per kg in Peshawar

Meanwhile, LPG continues to sell at inflated rates in Peshawar, with prices ranging between Rs580 and Rs620 per kilogramme despite the official rate fixed by the OGRA.

Local dealers said the price of a 15kg LPG cylinder remained at Rs8,000, while retailers were charging arbitrary rates in the open market, contrary to the regulator’s notified prices.

They warned that LPG prices could increase further in the coming days due to supply constraints and other market factors.