Govt Plans Major Policy Shake-Up as LPG Prices Hit Rs. 7,200

Pakistan's Prime Minister Shehbaz Sharif has established an eight-member ministerial committee to assess reforms in the country's liquefied petroleum gas (LPG) policy. This move comes as LPG prices for an 11.57-kilogram cylinder have risen between Rs. 6,000 and Rs. 7,200 due to supply interruptions. The proposed changes involve state-owned enterprises (SOEs) taking over LPG imports and pricing from the Oil and Gas Regulatory Authority (OGRA), with private sector participants then paying the set prices.

Protests from LPG stakeholders, including marketers and dealers, led to the review of the policy, which was set to commence within a week. The proposal includes creating a Producer Price Differential Fund, where refineries and producers will deposit the difference between local and imported LPG prices into a dedicated Public Account.

The fund, audited by the Auditor General of Pakistan, will be utilized by the federal government to offer subsidies to vulnerable LPG consumers via the BISP scorecard. Around 10 percent of locally produced LPG will be allocated to state-owned marketers for use in Gilgit Baltistan, Northern Areas, and remote regions, while the remaining 90 percent will be allocated to prequalified bottlers through transparent monthly auctions.

The committee, headed by the petroleum minister, will review proposed reforms, cylinder standards, and the local LPG model before presenting a comprehensive report to the prime minister within a month.