State owned liquid gas producer, Oil and Gas Development Company Limited (OGDCL), has reduced its LPG base stock price for the third time this month to Rs58,000 per ton (exclusive of duties and taxes).
The latest price reduction of Rs7,000 per ton came in the wake of piles of unsold stock and a mounting domestic production, which is up by 25 per cent since the start current year.
“LPG demand typically begins to slacken with the onset of summer. However, this year demand has also been affected by an over supply of product both locally and from cheap and under invoiced Iranian imports,” said Belal Jabbar, the spokesman for the LPG Association of Pakistan (LPGAP).
The current producer price is $225 or Rs20,000 per ton below the Saudi Aramco Contract Price (CP) with which LPG prices have remained indexed. The drastic reduction in price is effectively a de-linkage from the international price benchmark and augurs well for the LPG sector as the product has become cheaper than petrol, diesel and even CNG.
“In light of the increasing domestic production which has made imports altogether redundant, we urge the Federal Minister Dr Asim Hussain to immediately notify de-linking of LPG producer prices from Saudi Aramco CP as this will keep the product affordable for the common man,” said Jabbar.
The revised price of LPG companies for their distributors will be Rs970 for domestic and Rs3,732 for commercial cylinders. Similarly distributor price for consumers will be Rs1,125 for domestic and Rs4,320 for commercial cylinders. Retail prices in different parts of the country are expected to be Rs90 per kg in Sindh and Balochistan, Rs95 per kg in Punjab, Rs100 per kg in KP, Rs105 per kg in Azad Jammu Kashmir and Rs115 per kg Northern Areas.
