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LPG Producers to Give 10% Output to State MarketersBusiness
LPG producers will hand 10 per cent of their output to state-owned marketers, with the rest sold through transparent monthly auctions.
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Liquefied petroleum gas producers will allocate 10 per cent of their production to government-owned marketing companies, while the remaining 90 per cent will be sold through transparent auctions. The decision was taken at a meeting in Islamabad on Saturday chaired by Petroleum Minister Ali Pervaiz Malik.
The Oil and Gas Regulatory Authority will issue a notification to give effect to the decision, officials said. The allocation is aimed at ensuring supplies to northern areas, Gilgit-Baltistan and other remote, hilly and hard-to-reach regions, where households depend on LPG cylinders and existing air-mix plants.
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The meeting also decided that the daily allocation under the new auction mechanism will be capped at 20 metric tonnes per participating company, to ensure fair competition and wider market access. The auctions will be held in the presence of the media, and the floor price will be set at 5 per cent below Pakistan State Oil’s import-parity price.
The decision was taken at the first meeting of the LPG Committee, held under the chairmanship of the Secretary Petroleum, following the federal government’s approval of the deregulated LPG framework. The committee includes the chairman of the Oil and Gas Regulatory Authority, the managing directors of the Oil and Gas Development Company and Pakistan State Oil, the president of United Energy Pakistan, and the Director General for Liquefied Gases. The authority’s chairman, Masroor Khan, and senior officials of the Petroleum Division attended the meeting.
“The government is endeavouring to ensure LPG availability at reasonable prices,” Malik said, adding that efforts were being made to address public concerns over availability, affordability and unfair pricing. The federal cabinet approved the deregulated framework on November 4, under which state-owned entities will lead LPG imports and announce a monthly base price reflecting the actual landed cost of imports.
Under the new framework, the regulator will stop issuing monthly price notifications, and LPG importing and marketing companies will determine their own marketing margins and freight costs. A targeted subsidy fund for low-income households is also planned, and a special provision allows the Pak-Arab Refinery to allocate 75 per cent of its auctionable share to its subsidiary, PARCO Pearl Gas Limited.
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