LPG marketing companies have reported a sharp reduction in their sales for the month of February. Sales have slowed down by as much as 30 per cent due to the imposition of the petroleum levy, with has reduced off take. Earlier in the month, State owned LPG producers that account for 70 per cent of the country’s production had increased their ex plant price by Rs20,000 per tonne after including the petroleum levy. The levy has been imposed on local production in order to equate its price with imports. “The impact of the petroleum levy has lead to a sharp reduction in sales as LPG has lost its competitiveness to other fuels,” said Belal Jabbar, the spokesman for LPG association of Pakistan. LPG companies and consumers had challenged the notification of the petroleum levy imposed on local LPG production in the Lahore High Court on the grounds that ‘it is based on malafide, inasmuch as, in the garb of the said notification, protection is being extended to the importers of LPG by enhancing price of the locally manufactured LPG’.
They had further contended that the impugned petroleum levy is being imposed discriminately as the imported LPG is not being taxed. The court admitted the petition and issued notices to the secretary petroleum and deputy attorney general to file their comments before the next date of hearing which has been fixed for 27th February, 2012. The court further stated “secretary, ministry of petroleum and natural resources shall depute a senior officer to attend to this court on the next date of hearing along with a summary prepared by the ministry which forms the basis of the impugned notification dated 16.1.2012 in order to establish the reasons behind the imposition of the petroleum levy.” Pressure is mounting on local LPG producers to reduce prices as companies are unable to lift their allotted quantity. At least one LPG producer has begun selling LPG to companies that are not its allottees in an effort to clear its stock.
LPG sales drop by 30pc
