ISLAMABAD: The local producers of liquefied petroleum gas (LPG) on Wednesday opposed to fresh concessions to the importers claiming that it will result in flooding of local market with cheap imported fuel.
The LPG Pricing Committee, which met under the chair of Secretary Petroleum Asad Hayauddin in the chair, noted that the LPG prices have crossed Rs151 per kg amid surging demand in the wake of heating requirements and low pipe gas pressure in several parts of the country.
For bridging the supply and demand gap the petroleum ministry proposed a cut in the sales tax by 2.5 per cent to 7.5pc on LPG imports and imposition of an additional petroleum levy (PL) on locally produced LPG.
Currently the PL at locally produced LPG was Rs4,669 per tonne and the proposal is to raise it to Rs6,175 per tonne.
However, the local LPG producers opposed the proposal saying it will result in extraordinary facilitation to importers at the expense of local industry.
The heads of Parco, OGDCL, PPL, SSGC-LPG, PSO, chairmen of LPG Association of Pakistan and All Pakistan LPG Distributors Association and secretary-general Consumers Right Commission of Pakistan attended the meeting.
The managing director of SSGC-LPG who participated in the meeting via video link from Karachi said that both LPG terminals of the company had a stock of around 12,500 tonnes which was the peak capacity.
The meeting was informed that most of the LPG was imported from Iran and the rates were less than the Saudi Aramco Contract price which was the benchmark set by the government.
The secretary petroleum noted that there was a need to have updated data regarding demand and supply situation as well to calculate the cost comparison between local LPG and the imported product.
The stakeholders have been directed to resubmit their proposals regarding LPG pricing formula to ensure a level playing field for both local producers and importers.
Published in Dawn, January 2nd, 2020