LPG cylinders selling at over twice official price amid supply crisis: sources

• Pakistan imports 70% of its LPG.
• Half of LPG imports come from Iran.
• Government plans to import LPG itself.
  

ISLAMABAD: Liquefied petroleum gas (LPG) cylinders are being sold at more than twice the official price across the country as disrupted imports trigger a supply crisis, sources in the Oil and Gas Regulatory Authority (Ogra) told Geo News on Wednesday.

Ogra has fixed the price of an 11.8kg domestic LPG cylinder at Rs3,296, while sources said cylinders were currently being sold at more than double that rate.

According to Ogra sources, the crisis emerged following the closure of the Iranian border, disrupting supplies from a country that accounts for 50% of Pakistan’s total LPG imports.

Pakistan imports around 70% of its LPG requirements, with supplies coming from Iran, Iraq and Oman, the sources said.

They warned that the crisis could worsen if the Iranian border was not reopened for LPG imports.

Meanwhile, LPG imports from Oman and Iraq had also been disrupted due to the closure of the Strait of Hormuz, the sources added.

Ogra sources attributed the surge in LPG prices to the supply disruption, saying enforcement teams were taking action against those overcharging for available stocks.

Pakistan’s average annual LPG consumption stands at between 2.4 million and 2.5 million tonnes, according to the sources.

Govt expects improvement in days

Petroleum Minister Ali Pervaiz Malik, meanwhile, said the world was going through “extraordinary circumstances” concerning energy prices and that government measures on LPG prices would become visible soon.

Appearing on Geo News’ programme “Capital Talk”, he said Pakistan consumed around 6,500 to 7,000 tonnes of LPG daily, of which around 2,000 to 2,500 tonnes were produced locally and the remainder imported.

Malik said LPG should be priced between Rs400 and Rs425 per kilogramme and vowed action against those charging excessive rates.

“Those overcharging for LPG will face action,” he said, adding that the government was fully prepared to deal with profiteers.

The minister said the government would itself import LPG and bring it into the system, predicting that an improvement in prices would begin within two to three days.

He said the government would also bring transparency to LPG pricing similar to that of petrol.

Malik claimed the difference between market and local LPG prices amounted to Rs30 billion, accusing a small number of people of exploiting consumers after obtaining stay orders.

“A few people are sitting like vultures after obtaining stay orders and sucking the public’s blood,” the minister said.

He said the government had warned them until September and again urged them to provide LPG at a fair price.

According to Malik, the prime minister had tasked the attorney general with pursuing the remaining cases to have the stay orders vacated.

Winter gas supply strategy

The petroleum minister also said Pakistan previously received 1,000mmcfd of gas from Qatar, while pointing to the prevailing situation in the Strait of Hormuz.

Despite the difficulties, he said, Qatar had supplied gas to Pakistan at $12 to $13 instead of $30.

Malik said the government had devised a strategy for gas supplies from November to February, with efforts aimed at ensuring consumers continued receiving gas during all three meal preparation periods.

He added that funds had been allocated for the fuel subsidy and that considerable room remained within the budget.