LPG price twice the official rate in open market amid shortage

The government has announced a significant increase in the price of liquefied petroleum gas (LPG), with the official price in the open market now twice the official rate due to a shortage caused by the US-Iran war. The Oil and Gas Regulatory Authority (Ogra) raised the November price to Rs294,075 per tonne from Rs279,341 in the previous month. Consequently, the retail rate for an 11.8 kg domestic LPG cylinder has risen from Rs3,470 to Rs3,643, a difference of Rs173.

This price hike is attributed to the increase in Saudi Aramco-CP and the US dollar exchange rate, resulting in a Rs14.73 per kg rise in consumer price. The market price for LPG ranges from Rs630 to Rs400 per kg, with distributors and company-operated franchises charging these rates. The gas shortage is particularly severe due to the closure of Iran's border, from which at least 70% of LPG imports originate. Only 30% is produced locally.

The LPG Distributors Association of Pakistan has warned of a potential strike on November 16 if the private sector is not included in the upcoming LPG policy. The LPG marketing companies also threatened to shut down their businesses during the same period. Ali Haider, chairman of the Pakistan LPG Marketers Association, stated that they would observe a strike if the government reversed the deregulation of LPG.

The shortage is partly due to the control of the ProGas terminal at Port Qasim by the Sui Southern Gas Company, which imported LPG around seven months ago. The association has also written to the Petroleum Minister, accusing state-owned entities of failing to import LPG despite collecting billions of rupees in the form of a petroleum development levy.