Lahore, September 12 – Ministry of Petroleum fails to respond to its national duty of providing LPG at cheaper rate to the masses and is instead involved in profiteering by auctioning its production of LPG at exorbitant rates, said by the Chairman of LPG Association of Pakistan (LPGAP) & former LCCI president Farooq Iftikhar in a statement on Saturday.

He said that it is a matter of concern that Ministry of Petroleum is playing role of silent spectator and taking no measures to rescue the local LPG industry which is struggling for survival while smugglers of low quality, spurious and adulterated LPG are playing freely.

Farooq Iftikhar said that importers of LPG are on a rampage and are importing over 20,000 MT of LPG as import price is extremely attractive. In fact Government is helping the importers by keeping price of local LPG high.

We have time and again impressed upon OGRA & MNPR that since December, LPG producers have consistently been setting their LPG base-stock prices far above the monthly Saudi Aramco Contract Price, failing to pass on the benefit of reducing global  prices to consumers. The current Saudi CP is $333/MT while OGDCL has notified its base-stock price at Rs. 43,000/MT and PRL at Rs. 42,000/MT & Mid Country Refinery PARCO at Rs. 45,000/-, Chairman LPGAP added.

He said that such pricing decisions are in apparent disregard of the LPG (Production and Distribution) Rules, specifically Article 2(R). Additionally, since virtually all LPG producers have “Signature Bonus” and “Profit Sharing” mechanisms now in place with LPG Marketing Companies, the actual LPG base-stock price is even higher than notified. As a result, locally produced LPG is far more expensive than it reasonably ought to be.

Farooq Iftikhar said that several LPG producers have also been failing to abide by Article 18 of the LPG Rules that requires the base-stock price to remain fixed for at least a month to foster stability and prevent speculative practices. These LPG producers have been revising their LPG base-stock prices several times in a given month.

He said that in order to safeguard the interests of consumers, we urge the Authority to review LPG producer pricing decisions, including the issue of signature bonuses and profit-sharing, and intervene, if deemed necessary, in terms of Articles 18(1) and 18(2) to “determine a reasonable price of LPG base-stock,” keeping in view the price of imported LPG and the public interest.

Chairman LPGAP urged the Ministry of Finance to swiftly act and stop over import of LPG  besides bringing the price of local LPG in line with Article 18 of LPG Rules.