LPG prices on rise again

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Local producers have raised the price of liquefied petroleum gas (LPG) by Rs5,353 to a record high of Rs118,429 per tonne in accordance with Saudi Aramco Contact Price.
This was stated by the Chairman of FPCCI Standing Committee on LPG and Pattern in Chief of All Pakistan LPG Distributors Association (APLPGDA) Abdul Hadi Khan here on Saturday.
He said that Saudi Armco Contract Price (CP) had surged to record high due to surge in prices of butane by $140 per tonne while propane is up by $220 per tonne. Hadi pointed out that domestic price of LPG has been increased by Rs5 to Rs135-145 per kilogram, 11.8 kilogram cylinder by Rs63 to Rs1,520-1,580 and 45.4 kilogram cylinder by Rs243 to Rs5,850-6,075. Expressing serious concern over this rise, Hadi said that distributors will protest against this rise and said an emergency general body meeting of APLDA has been convened for next week to prepare a line of action against the government and local producers. He said that 6,000 distributors will hold protest rallies and block gas fields and refineries over this rise. He said LPG sale has declined by 40 to 50 per cent due to high prices, further shrinking the business of more than 6,000 LPG distributors in the country and their survival is in danger. He urged Petroleum Minister to reduce dependence on imported LPG and concentrate on enhancing local production.
Meanwhile, LPG Association of Pakistan (LPGAP) pointed out that state owned LPG producer, PARCO increased its base stock price from Rs85,924 to Rs102,000 per tonne, following the increase in Saudi Aramco Contract Price for March which rose to a record high of $1,200 per tonne. Following the suspension of the Petroleum Levy by the Lahore High Court, LPG prices had reduced from Rs140 to Rs130 per kilo. However that trend will now stand reversed. “Relief provided by the court has proved short lived. Although PARCO has not matched the Saudi Aramco CP for March, its latest price notification is the highest ever price as charged by Producers” said Belal Jabbar, spokesman of LPGAP.
The LPG Association of Pakistan had requested LPG producers to refrain from increasing its price. In its letter addressed to all LPG producers it said “The suspension of PDL resulted in the immediate rationalisation of ex-LPG marketing company prices to the benefit of LPG consumers. The PDL suspension has helped stabilise the market and advantage consumers.” It further stated, “We also welcome the comments of Dr Asim Hussain in newspapers yesterday that local LPG producer prices shall be delinked from the Saudi CP which has reached an unprecedented, all time high of $1200/MT this month. Producer prices should be formulated in light of market realities.” “The resultant price increase of Rs18,746 per tonne will increase the price of domestic and comercial cylinders from Rs1534 to Rs1755 and Rs5902 to Rs6753. Retail prices are expected to increase to Rs148 per kilo, making LPG once again the most expensive fuel in Pakistan” said Belal. LPG imports for February have been zero, whereas demand has also been shrinking due to a continuous hike in LPG prices by LPG producers. The government of Pakistan accounts for 70 per cent of the country’s LPG production and is the single largest and immediate beneficiary of the increase in prices.