In an unprecedented move, the Ministry of Petroleum came out openly against the Liquefied Petroleum Gas Association of Pakistan (LPGAP) declaring them a mafia, fleecing the people against the move to bring competitiveness in the sector to address the energy crisis in the country.
A statement issued by the Ministry of Petroleum on Saturday strongly rejected the allegations of LPGAP against the LPG Policy 2011. It said the claims made by LPGAP are not based on facts. It is a reaction of those who have thrived on LPG quota system thereby fleecing the general public by charging very high prices. In fact the group has not allowed competition in the business to grow which has resulted in cartelisation. As a matter of fact, by mere announcement of the new LPG policy, the prices of household cylinder dropped by Rs56 per cylinder. LPGAP and its subsidiary the All-Pakistan LPG Distributors Association (APLPGDA) in a rare joint press conference on September 16 had strongly condemned the governments new LPG Policy 2011 and demanded its immediate rollback. They highlighted the adverse impact of the new LPG policy, which does not provide any incentives to increase local production. The new policy comes into effect on October 3, 2011. Their representatives had claimed that the government had not consulted stakeholders before drafting the policy and it was made in complete secrecy. They claimed that the officials of the Ministry of Petroleum openly state that the new policy was aimed at crowding out the private sector for re-establishing a public sector monopoly. They alleged said that the new policy was made for the sole purpose of resuscitating a bankrupt private sector LPG marketing company and the government was attempting to provide extraordinary benefits to a single party at the cost of the entire industry and consumers and would be challenged in the court.
The Petroleum Ministry statement said the new LPG policy is based on the principle of parity of price for local and imported LPG. This has taken away the market manipulation power of local LPG mafia. The ultimate benefit of this price parity will go to general public who will not be held hostage to the monopoly of local LPG mafia. The companies with import based business will be very competitive thus saving the general public from clutches of LPG cartels. The government has intervened at a right time to takeover Pro-Gas terminal and has saved it from falling into the hands of a particular group. With the given gas shortage issues, government is striving to promote LPG as an alternate fuel and this can best be achieved through extensive network of the two state owned gas utility entities, SSGC and SNGPL. LPG business will be run by subsidiary of these companies on professional lines. It is hoped that these steps will further curtail the manipulation power of LPG mafia.
