Shehbaz says ‘LPG mafia era’ over as govt announces competitive auction system

ISLAMABAD: Prime Minister Shehbaz Sharif on Wednesday announced measures to overhaul Pakistan’s liquefied petroleum gas (LPG) market, saying the government had ended the decades-old dominance of the ‘LPG mafia’ and introduced a competitive system to ensure transparent supplies and pricing.

He also said the government had averted a planned Rs15-per-litre increase in petrol prices by persuading oil refineries to share their windfall profits rather than passing the additional cost on to consumers.

Addressing a federal cabinet meeting, Shehbaz praised the petroleum ministry, the Oil and Gas Regulatory Authority (Ogra) and a government committee for negotiating the arrangement with refineries.

He said the decision had prevented an additional burden on ordinary consumers at a time when rising energy costs were putting pressure on household budgets.

On LPG, the prime minister said the government had introduced a competitive mechanism involving state-owned companies and private importers to break the grip of a market that he said had remained under the control of a ‘mafia’ for decades.

The four state-owned entities involved in the new arrangement are Pakistan State Oil (PSO), the Sui Southern Gas Company’s LPG subsidiary, the Pakistan LNG Limited and the PARCO Pearl Gas, officials told the meeting.

Under the new mechanism, the government will allow companies to import LPG and sell it competitively, while locally produced supplies will be offered through open auctions in smaller lots.

Petroleum Minister Ali Pervez Malik told the meeting that Pakistan’s daily LPG requirement was around 7,000 tonnes, of which approximately 2,500 tonnes were produced domestically.

The first auction of locally produced LPG is scheduled for next week and will be conducted under camera surveillance, he said.

Shehbaz said that the profits generated through the auction of domestic LPG would go to the national exchequer and could subsequently be used to provide relief to consumers.

He also directed the authorities to ensure transparency in the new system and praised Deputy Prime Minister and Foreign Minister Ishaq Dar and the energy and finance ministers for their efforts.

The prime minister said the government was also monitoring the implementation of its fuel subsidy programme, which would continue at least until the end of December.

He said 15 million people had so far benefited from the programme, with around Rs28 billion spent on it. Assuming an average household size of five people, he estimated that approximately 75 million people had indirectly benefited.

Shehbaz said the Intelligence Bureau was monitoring the programme and that action would be taken against petrol pumps found involved in irregularities. He directed the petroleum minister to shut down such outlets and impose heavy penalties.

Turning to the winter energy outlook, Shehbaz said the government was holding frequent meetings to ensure uninterrupted supplies of LNG, LPG, petrol and other energy sources amid challenges affecting maritime routes.

He assured the public that the government would make every effort to meet the country’s energy requirements, keep power plants operational and contain the impact of rising international prices.

The prime minister also said Pakistan was continuing diplomatic efforts to reduce regional tensions.

He referred to recent visits to Tehran by Pakistani delegations, including one led by Chief of Defence Forces Field Marshal Syed Asim Munir, as well as visits by Saudi Arabia’s defence minister and Turkish intelligence chief Ibrahim Kalin.

He said discussions had focused on reducing tensions in the region and strengthening cooperation under the trilateral arrangement involving Pakistan, Saudi Arabia and Turkiye.