LPG: crisis beyond prices

Pakistan's energy landscape often focuses on oil, LNG and electricity, but liquefied petroleum gas (LPG) has been overlooked. Recent retail prices for an 11.6kg cylinder have surged to over Rs7,000, more than double the previous year's price. This price increase is largely due to disrupted imports from Iran and suspension of supplies from Qatar due to the US-Iran conflict.

LPG is not just an alternative fuel; it is essential for millions of households, especially in rural and remote areas without piped gas. It also serves as a cost-effective fuel for three-wheelers. The sudden price surge is not just an affordability issue but a matter of access to a basic necessity. The government's notified price for LPG stands at Rs280 per kilogram, but retail prices have soared to Rs600 or more.

This discrepancy highlights the lack of transparency in cost reporting. The inflationary impact extends beyond LPG, as it contributes to the rural consumer price basket, potentially increasing rural inflation. This could further strain households, especially those without piped gas connections. The burden of higher prices falls unevenly on vulnerable households.

Government intervention is needed to address the market discrepancy and protect consumers. This could involve transparent cost disclosure, competition among importers, enforcement against hoarding and profiteering, and targeted support for vulnerable households. The immediate challenge is ensuring sufficient LPG supply before winter demand peaks, while the longer-term goal is to reduce Pakistan's dependence on a limited number of suppliers and improve its pricing framework.