Parco raises LPG rates by over 14pc

Parco — a company partly owned by the government — was the first producer to opt for increasing prices of LPG after Pakistan government allowed the complete deregulation of liquefied petroleum gas (LPG) prices.

According to a circular of teh comapny, it has increased ex-refinery price of LPG from Rs39,809 to Rs45,534 per ton, showing a raise of Rs5,725 per tonne.

With the addition of 15 per cent general sales, the LPG sale price has increased from Rs45,878 per tonne to Rs52,462 per tonne, up by Rs6,584 per tonne.

As a result, the price of a domestic cylinder has been increased by Rs78 and commercial cylinder by Rs312. In other words, the sale price has increased by Rs6.61 per kg, according to LPG distributors Association of Pakistan.

Under a last week decision of the caretaker economic coordination committee (ECC) of the cabinet, the ministry of petroleum and natural resources on December 3 stopped the Oil and Gas Regulatory Authority (Ogra) from determining producer prices.

"LPG producer price may not be notified by Ogra. Accordingly, the LPG producers may be allowed to fix their prices at their own on monthly basis," said a notification issued by the Directorate-General of Gas of petroleum ministry to the Chairman Ogra.

Under a notification issued by the prime minister's secretariat, the Ogra's role has been restricted only to the extent of "monitoring producer and consumer prices" with the objective that these remain at reasonable level. The "Ogra will monitor the LPG consumer prices and will submit weekly report to the government."

The Parco's decision was immediately condemned by the LPG Distributors Association Pakistan (LPGDAP) chairman Irfan Khokhar. He said Parco decision was unjust and a cruel joke against the people. He said if the producer price was not reduced immediately to Rs25,000 per tonne, the distributors would disrupt LPG supplies across the country because the consumers had started to give up LPG consumption and its sale had already declined by 30 per cent.

Interestingly, the LPG Producers Association, a grouping of all licensed LPG marketing companies, also distanced itself from the Parco decision and called for its reversal. A spokesman for the LPG Producers Association Fasih Ahmed said the price increase announced by Parco was "wrong decision at the wrong time".

"The 15 per cent increase notified by Parco is unjustified and will unnecessarily burden the LPG consumer at a time when LPG prices are already at an all-time high," he said.

He said the producers association believed the government's decision to deregulate the LPG sector was a positive step which should lead to lower end-consumer prices.

"We also believe that all stakeholders in the LPG sector, including producers and marketing companies, must conduct themselves professionally and responsibly," said Fasih Ahmed.