Corruption in LPG industry touches Rs350b in last 7 years

Liquefied Petroleum Gas (LPG) industry in the country has made record corruption of over Rs350 billion in the last seven years as LPG mafia seems to be given a free hand to make money through charging consumers with exorbitant prices.

PRICE HIKE

LPG marketing companies, under the current shortage of gas in the country, has also increased the price of the liquefied gas by Rs30 per kilogram in the last three months without any justification, Irfan Khokhar Chairman, LPG Distribution Association Pakistan (LPGDAP) said while addressing a press conference here at Karachi Press Club on Thursday.

HELPLESS GOVernmenT

The highly influential group and profiteers in the industry were making an increase without any fear as concerned authorities in government were helpless to control the price forcing the poverty hit consumers especially in the hilly areas of the country to buy the much costlier fuel in winter season.

RECORD BREAKING PRICES

As per data provided by Khokhar, the companies were charging the people with the record additional price of Rs366 and Rs1,416 per domestic slender and commercial slender respectively. The per kilogram price of LPG in hilly areas including Gilgit Baltistan, Sawat, FATA and others has also reached Rs175 without any notification of ministry of petroleum or Oil and Gas Regulatory Authority (OGRA).
“The price of gas could be reduced to at least Rs90 per kg from the existing Rs175 per kg if the government exempts LPG import of General Sales Tax while making the import feasible to the importers,” he said adding that at least 13000 MT LPG was imported last month which was 38 per cent of local production. According to Chairman LPGDAP the unjustified increase in price by LPG companies making international prices an excuse has multiplied the woes of crisis hit people.

CORRUPTION & IRREGULARITIES

Talking about corruption and irregularities in the LPG industry, Khokhar alleged that the price of fuel was increased by 541 per cent in the last seven years as the production cost jumped to Rs92 per kg from Rs17 per kg. From April 2006 to January 2012 production price reached to Rs92133 per MT thus making the additional cost of production by Rs75133 per MT and Rs75 per kg in last five years.

LPG MAFIA

Collectively LPG mafia pocketed Rs350 billion increased price in the past seven years. In the last seven years, the number of LPG producers was increased from five to 11 while there were 90 companies currently as compared to earlier number of 17. The huge irregularities made in the allocation, distribution and award of LPG quota by the government among retired army officers Khalid Maqbool, Muneer Hafeez and Moinuddin Haider, two former chairmen of the National Accountability Bureau and politicians, were also reasons for the current skyrocketing prices of LPG, he claimed.

LPG POLICY 2011

Talking about LPG Policy 2011, he said, the country could generate at least Rs5 billion per year if the policy was implemented as it would eliminate the control and monopoly of the LPG mafia in the country.
He also praised Dr Asim, minister of petroleum and natural gas for his efforts to implement the new LPG policy. He also appealed prime minister, chief justice of Pakistan, and ministry of petroleum to take action against LPG companies which were busy in black marketing and charging the poor people with exorbitant prices against the international rates. He requested the chief justice to remove stay over LPG policy in order to provide a cheaper fuel to the consumer. In reply to a query, he said present and past governments had failed to curb the corruption and black marketing in LPG industry which ultimately have fallen heavily on consumers.