Key Takeaways
- LPG prices have reached record levels, with Rs600 per kg in hilly areas and Rs500 per kg in Punjab and Khyber Pakhtunkhwa.
- The surge is due to a sudden closure of trading points with Iran and a shortfall in domestic production.
- Domestic cylinder prices have also risen significantly, with a domestic cylinder costing Rs7,200 in hilly areas.
Liquefied petroleum gas (LPG) prices in Pakistan have hit record levels, with the cost reaching up to Rs600 per kg in hilly areas and Rs500 per kg in Punjab and Khyber Pakhtunkhwa. This surge is attributed to a significant shortfall in supply, exacerbated by the closure of trading points with Iran.
The situation is expected to worsen as winter approaches, with daily LPG consumption peaking at 6,000-7,000 tonnes. Currently, the official rate fixed by the Oil and Gas Regulatory Authority (Ogra) for October is Rs279 per kg, and the price of a domestic cylinder is set at Rs3,350.
Domestic cylinder prices have surged to Rs7,200 in hilly areas and Rs6,000 in Punjab and Khyber Pakhtunkhwa, reflecting the increased cost of LPG. The demand for LPG is not only high in remote areas for heating and cooking but also in settled areas of Sui Northern Gas Pipelines Ltd (SNGPL) and in some parts of Sui Southern Gas Ltd, mainly due to gas load-shedding in the winter months.
Pakistan produces between 2,000 and 2,500 tonnes of LPG daily, with an equal amount being both imported and smuggled from Iran. The recent surge in open-market prices is due to the sudden closure of all trading points with Iran, which has led to a significant supply shortage.
LPG Distributors Association Chairman Irfan Khokhar has warned that prices could rise further in the coming days, adding to the financial burden on households that depend on LPG for cooking and heating. He accused Ogra of remaining a silent spectator to what he described as billions of rupees in overcharging, despite the significant gap between the regulated and prevailing market prices.
Khokhar stated, 'The entire situation stems from the regulator’s mismanagement and lack of oversight. While immediate LPG imports are needed to improve supply, Ogra must amend the required notifications and determine the basket price for both imported and locally produced LPG.'
He added that the price of local LPG was Rs279 per kg, while the average market price was around Rs450 per kg across the country. 'The sellers were fleecing consumers with huge margins even on local LPG,' he said. 'Ogra should address the wide gap between official rates and market prices, and the government should devise a mechanism similar to petrol and diesel, where locally produced and imported prices are balanced, so the price is determined by mixing local and imported LPG.'
The surge in LPG prices is impacting households across the country, with daily LPG consumption around 4,000-4,500 tonnes, rising to 6,000-7,000 tonnes during peak winter. The government and regulatory bodies are under pressure to address the supply shortage and ensure fair pricing for consumers.
The entire situation stems from the regulator’s mismanagement and lack of oversight.
Irfan Khokhar, LPG Distributors Association Chairman
Ogra must amend the required notifications and determine the basket price for both imported and locally produced LPG.
Irfan Khokhar, LPG Distributors Association Chairman
