LPG availability, fair pricing among govt priorities, says petroleum minister

Petroleum Minister Ali Pervaiz Malik emphasized on Saturday that ensuring adequate supply and fair pricing of liquefied petroleum gas (LPG) is a top government priority. The Ministry recently introduced a new LPG policy aimed at increasing competition and supply through government procurement by four state-owned enterprises (SOEs) under government-to-government (G2G) and business-to-business (B2B) contracts.

The government instructed these SOEs to re-enter the LPG import business, addressing the severe supply constraints and rising prices. The new policy mandates that locally produced gas will be sold through open auctions, removing intermediaries who profit from the current system. State-run Radio Pakistan reported that the minister attended the inaugural meeting of the committee established to ensure transparent LPG auctions.

Under this mechanism, local LPG producers will allocate 10% of their output to government-owned marketing companies to meet remote areas' needs. The remaining 90% locally produced LPG will be sold through a transparent auction with media present. Each company will be allowed to acquire a maximum of 20 metric tonnes of LPG daily via the auction, with daily production monitored and reported to the prime minister.

All eligible firms will have equal opportunities to participate in the auction, according to Malik's remarks reported by Radio Pakistan.

LPG, often referred to as the "poor man's fuel," is now widely used by middle-class families for cooking and heating. As temperatures drop, more households are purchasing LPG cylinders. Earlier this week, Malik assured the public that the government will make every effort to meet the LPG demand during winter. His comments come as LPG supply has been disrupted due to the closure of Iranian border crossings, causing LPG cylinders to be sold at twice the official rate in the open market.

Malik addressed a press conference in Islamabad, stating that the government would make "utmost efforts" to ensure piped domestic gas supply during peak winter hours, even if the most expensive fuel must be procured for the piped network. He also noted that LPG is essential for various purposes beyond cooking, including by those without piped connections.