The Lahore High Court on Monday suspended the operation of LPG Policy 2011 till 5th October, on a petition challenging it and subsequent notifications to import 20 per cent of their supplies and deposit petroleum levy as per LPG policy 2011, hinting loopholes in the policy operations. In addition, the court issued notice to the Ministry of Petroleum and Natural Resources and Oil and Gas Regulatory Authority (OGRA) for 5th October and sought a full report commenting on the said petition. Justice Syed Mansoor Ali Shah passed these orders on a petition filed against Federation and OGRA by LPG distribution companies including Petroleum Gas Private Limited and three others through Shahid Hamid advocate.
The petition stated that the federal government on September 18, 2011 issued notification of LPG Policy 2011, without. any stakeholder inputs, gave monopoly rights to the public sector over Pakistan’s LPG sector, imposed a Petroleum Development Levy forcing a mandatory increase in local LPG producer prices, and obligated LPG marketing companies to purchase 20 per cent of their supplies from LPG importers and brokers ignoring the fact that locally purchase LPG was far cheaper.
They submitted that according to new policy the maximum bare stock price of the LPG and amount of petroleum levy would be determined and notified by the OGRA on monthly basis by third day of every month. They said at present 85 per cent of the LPG was produced locally while only 10-18 per cent was being imported. As per policy, the OGRA issued a letter on September 21, 2011 to all LPG marketing companies to import or purchase from importers 20 per cent of their local supplies on monthly basis.
It was also informed that reasonable consumer price of LPG had been determined as Rs1355 per 11.8 Kg cyl. In addition, it was mentioned that failure to do so for three consecutive months would render them liable to cancellation of their LPG allocations.
OGRA, as per LPG Policy 2011, issued a letter to all LPG producers informing that bare stock price of LPG had been determined at Rs83,973 per metric ton whereas petroleum levy would be Rs11,485 per metric ton. Therefore, the LPG producers must deposit petroleum levy in the government treasury as per their respective production with effect from September 21 and punitive measures would be taken against them, if failed to comply, they added.
The petitioners said they wrote letters to the OGRA expressing their concerns on new policy but to no avail. They contended that the LPG Policy 2011 was against interest of all stakeholders. They pleaded the court to declare all orders by the OGRA in the light of new policy void and restrained respondents from taking any action against them. The court after hearing the arguments admitted the petition for regular hearing and issued notice to the respondents for October 5 besides suspending the operation of LPG Policy 2011.
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