The government has introduced a new mechanism for the transparent auction of locally produced liquefied petroleum gas (LPG), with 90% of production to be sold through auctions in the presence of the media. The decision was reached during the first meeting of a committee established to ensure transparent LPG auctions in Islamabad.
Minister for Petroleum Ali Pervaiz Malik stated that addressing public concerns regarding the availability and unfair pricing of LPG is a government priority. Malik said the new auction system is intended to ensure fair distribution of LPG, stability in the supply chain, and energy security. He further stated that all eligible companies will be provided with equal opportunities to participate in the auction.
Under the new mechanism, local LPG producers will allocate 10% of their production to government-owned marketing companies to meet the needs of remote areas. The remaining 90% of locally produced LPG will be sold through a transparent auction in the presence of the media. The committee decided that each company would be allowed to acquire a maximum of 20 metric tons of LPG per day through the auction.
The government previously unveiled a new LPG policy earlier this week aimed at creating competition and supplies through procurement by four state-owned enterprises (SOEs) under government-to-government (G2G) and business-to-business (B2B) arrangements. The government directed these four state-owned enterprises to re-enter the LPG import business to ease severe supply constraints and soaring prices. According to the policy, locally produced gas will be sold through open auctions to cut out intermediaries who profit from the existing arrangement.
Daily LPG production will be monitored, with the data presented to the prime minister. Malik noted that LPG is widely used for rickshaws, cooking, and other purposes by those not on the piped gas network. He observed that as temperatures fall, an increasing number of homes buy cylinders.
Malik addressed a press conference in Islamabad where he said, “Seeing people’s distress and also knowing that from December and January, winter will be at its peak […] even if the most expensive fuel has to be purchased for the piped network, we will bring it in and try to meet demand through LNG (liquefied natural gas).” He assured the public that the government will make “utmost efforts” to ensure piped supply of domestic gas for meal times and to meet the demand for LPG during the winter months.
