Pakistan prioritizes fair LPG pricing and transparent auctions ahead of peak winter demand

Petroleum Minister Ali Pervaiz Malik stated on Saturday that ensuring an adequate supply of liquefied petroleum gas (LPG) and maintaining fair pricing are top priorities for the government. The government recently introduced a new LPG policy designed to foster competition and supply through procurement by four state-owned enterprises under government-to-government (G2G) and business-to-business (B2B) arrangements.

The government has directed these enterprises to resume LPG imports to alleviate severe supply constraints and escalating prices.

The new policy requires the locally produced gas to be sold through open auctions, eliminating intermediaries who profit from the existing system. Malik attended the inaugural committee meeting for transparent LPG auctions, stating that the new mechanism would ensure a fair distribution of LPG, stability in the supply chain, and energy security.

Under the auction system, local LPG producers are to allocate 10 percent of their production to government-owned marketing companies to cater to remote areas. The remaining 90 percent of locally produced LPG will be sold through a transparent auction attended by the media.

Each company will be allowed to acquire a maximum of 20 metric tonnes of LPG per day via the auction, with daily LPG production monitored and presented to the prime minister. The minister assured that all eligible companies would have equal opportunities to participate in the auction. LPG, often referred to as the 'poor man's fuel,' is widely used by middle-class families for cooking and heating. As temperatures drop, more households opt to purchase cylinders for their cooking and heating needs.

Malik reiterated the government's commitment to meeting the demand for LPG during the winter months, noting that supply had been disrupted due to the closure of Iranian border crossings. This has led to gas cylinders being sold at twice the official rate in the open market. LPG is extensively used for rickshaws, cooking, and other purposes by those not connected to the piped gas network.

At a press conference in Islamabad, the minister addressed the public's distress, emphasizing that even if the most expensive fuel must be purchased for the piped network, the government will strive to meet demand through liquefied natural gas (LNG). He assured that the government will make "utmost efforts" to ensure piped supply of domestic gas for meal times, noting that LPG will also be required for other needs and by those without piped connections.