Government takes LPG price-setting power from OGRA, hands it to new company
LPG prices will now be set by a new company of PSO, Sui Gas and other oil firms instead of OGRA. The move aims to curb the LPG mafia and enforce official rates.
- A new company of PSO, Sui Gas and oil firms will set LPG prices instead of OGRA.
- It will fix next month's price, binding on all distributors and shopkeepers.
- LPG will be filled only in standard 2, 3 and 5 kg cylinders.
- Shops filling defective cylinders face sealing and heavy fines.
The government has taken the power to set LPG prices away from the Oil and Gas Regulatory Authority (OGRA). Daily Pakistan and Nawa-i-Waqt reported that a new company will now determine the price, in an effort to curb the LPG mafia and supply gas to the public at official rates.
According to the reports, the company will comprise PSO, Sui Gas and other oil companies. It will set the LPG price for next month.
The Ministry of Petroleum said, according to Daily Pakistan, that all distributors and shopkeepers must sell at the official price. Immediate action will be taken against anyone who charges arbitrary rates. Action has also been intensified against people selling LPG illegally.
LPG will be sold only through legally established LPG pumps and shops. Under a new system, a consumer will hand an empty cylinder to the shopkeeper and receive a filled one in exchange, which the reports say is meant to protect the public from accidents.
LPG will be supplied in standard cylinders of two, three and up to five kilograms, made by approved companies. Filling gas into substandard or defective cylinders will not be allowed. A shopkeeper caught doing so will have his shop sealed and face heavy fines. The government says it will work with companies to make cheap, good-quality standard cylinders available in the market.
Rana Abdul Jabbar, secretary general of the LPG Distributors Association, announced support for the measures and said the association is ready to cooperate fully. He asked the government to provide standard cylinders to shopkeepers at subsidised rates.
He said distributors oppose illegal LPG sales and the filling of defective cylinders, and that the association has told shopkeepers not to do so and will not support those who do. He also asked that pumps and equipment seized from shopkeepers be returned after a fine instead of being destroyed, as some shopkeepers bought them on instalments.
Background
khabr.pk reported on 10 November that LPG was selling in several cities at rates far above OGRA's official November price of Rs294 per kg, with market rates from Rs520 to Rs650. On 7 November we reported that the government planned to auction 90 percent of locally produced LPG, and on 2 November that LPG marketers had rejected a proposed market-based pricing formula.
Why it matters for Pakistan
Households across Pakistan that use LPG for cooking and heating are directly affected by who sets the price and whether shops follow it. Recent reports of market rates of Rs520 to Rs650 per kg against an official Rs294 show the gap the new rules target. Shopkeepers and distributors must now use standard cylinders or risk sealed shops and fines. Consumers will also exchange empty cylinders for filled ones under the new system.
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