State owned LPG producers, Oil and Gas Development Company Ltd (OGDCL) and Pakistan Petroleum Ltd (PPL), has increased LPG price by a whopping Rs20,000 per ton as per their notification issued on Monday. Pak Arab Refinery Ltd (PARCO) has also followed the suit by swelling its LPG price by Rs20,000. The new price of Rs113,000 per ton is inclusive of the Petroleum Levy of Rs11,486 and is the highest ever price for LPG in the country. “State owned LPG producers account for 65 per cent of the country’s production. The government is the largest and most immediate beneficiary of this hike” said Belal Jabbar, the spokesman for the LPG Association of Pakistan (LPGAP). Last month under pressure from the Ministry of Petroleum and Natural Resources, state owned producers had reduced their price by Rs10,000 per ton before adding the levy of Rs11,486. The Minister for Petroleum had stated that the levy would be absorbed by the producers and not passed on to the consumers. This forced reduction in price had however resulted in a loss of Rs192 million to the public sector LPG producers while generating revenue of Rs220 million for the government. In a bid to offset the loss, both OGDCL and PPL have decided to shift the burden of the petroleum levy on to the consumers. “Promises made by the minister have proved hollow. The imposition of the Petroleum Levy fits in with the agenda of the Ministry of Petroleum which is keen to increase the price of local product and equate it with of imports. This, despite the fact that local production meets 80 per cent of the country’s requirement” said Belal. The impact of this latest price will increase the price of domestic and commercial cylinders from Rs1,650 to Rs1,885 and Rs6,356 to Rs7,265 respectively. Retail prices are expected to top Rs160 per kilogram. “It is now evident that the Petroleum Levy has been implemented to facilitate imports over local production and to benefit certain people that are close to the top decision makers,” said Belal. Pakistan is the only country where a tax has been imposed on local production to facilitate imports. “The levy is pure discrimination against local production and will be challenged in the courts,” said LPGAP spokesman.
