Staff Report
ISLAMABAD:
The Petroleum Division has made necessary preparations to ensure reduction in the price of LPG by Rs 19 per kilogram and forwarded a summary to the federal cabinet’s economic coordination committee (ECC) for consideration and necessary approval.
Reliable sources informed that the Petroleum Division is all set to ensure reduction in LPG price by Rs 19/KG through relief in taxes imposed on LPG price. And, if the government approves the division’s proposal then price of a domestic cylinder will witness a decrease of Rs 224. Similarly, the petroleum division has also recommended to give an end to the petroleum levy of Rs 4669 per ton imposed on local LPG and decrease in the ratio of General Sales Tax (GST) from 10 percent to 7.5pc on imported LPG. Furthermore, due to reduction in PL and GST on LPG, there will be a loss of approximately Rs 17 billion to the revenue collection of the government.
“Petroleum Division has forwarded a summary to the federal cabinet’s economic coordination committee (ECC) after necessary consultations with concerned organizations,” said sources, adding,” if the cabinet gives its approval to the proposed recommendations then LPG price will witness a cut of Rs 19/KG.
LPG is a portable clean and efficient fuel and currently is domestically produced from five exploration and production companies (i-e OGDCL, PPL, MOL, UEPL and POL) and five refineries (i-e ARL, PRL, NRL, PARCO and BYCO). During FY 2021-21, average production of domestic LPG was around 2,010 Metric Tons per day and in order to meet the demand of LPG in the country, nearly 59pc of the total volumes of LPG was imported during 2020-21.
Around 10 million households are connected to Pipe Natural Gas (PNG) whereas nearly 23 million households rely on LPG or other commercial and non-commercial fuels like kerosene, coal, firewood, dung cake and solar etc. LPG is mostly used by the people living in villages of far flung areas where piped natural gas is not available.
An average low-income family consumes approximately three cylinders (36kgs) per month costing nearly PKR 5000. On the other hand, the same volume of natural gas supplied through piped network to the domestic households costs approximately PKR 3000.
Oil and Gas Regulatory Authority (OGRA) notifies the producer and consumers prices (linked with Saudi CP), however, the market/consumer price is driven by import price and demand supply situation. Therefore, actual consumer price may vary (above and below) from OGRA notified price during the year. Reportedly, during this month (September 2021), LPG is available to the consumers below OGRA’s notified price (Rs 2,060/cylinder) of 11.8kg for September 2021).
Earlier, Prime Minister Imran Khan, during a meeting of the federal cabinet held on 7th September 2021, had taken of LPG price hike and directed cut in LPG price.
