LPG price in 2006 was Rs 578.85 per cylinder. Domestic LPG production stands at around 1,200 ton per day, which was reduced to 900 ton per day after the JJVL plant shut down. In 2007 Pakistan's was producing 1,600 ton LPG per day. The LPG is mainly used as an alternative fuel for cooking and heating in rural as well as in urban areas following disruption in natural gas supplies. Moreover, it is also used in rickshaws as an alternative fuel in place of petrol and CNG.
Sources said that industries in some cities had also started using LPG after severe shortages of natural gas. The natural gas shortage surged to 1.6 Billion Cubic Feet (BCF) per day mark, compounding problems of all economic sectors. Currently, all sector of economy using gas are facing serious curtailment of gas, including industries in Punjab, fertiliser sector, CNG stations, commercial and domestic consumers.
According to Abdul Hadi Khan, a representative of LPG distributors, during the current month, the country imported about 10,000 ton of the commodity. Bilal Jabaar of LPG Association of Pakistan said that following the closure of JJVL's plant, importers are trying to bridge the shortage. The landed cost of this product at Karachi's Port Qasim is Rs 128,000 per ton, whereas it costs companies approximately Rs 9,000 per ton to transport the product to their respective plants.
An LPG importer, who did not want to be named, said: "Marketing companies last week increased the product price by Rs 60 per domestic cylinder because of expensive imports, while LPG retailers have enhanced (the price by) Rs 100 per kg". He said that the commodity's price also increased in the international market owing to high demand in Japan and elsewhere. Furthermore, local LPG prices had also surged because of depreciation of Pakistani Rupee against US dollar.
Analysts anticipate a further increase in prices in January. And in case of constant supplies from local producers, there was no chance of an abnormal price hike, they said. According to Mohammad Irfan Khokar, Chairman of All Pakistan LPG Distribution Association product price in hilly areas, including Murree, Mansehra, Balakot, Muzafarabad, Gilgit-Baltsitan and Federally Administrative Tribal Areas, had touched Rs 225 per kg mark, while in plains, including Lahore, Faisalabad, Sargodha, Rawalpindi, Islamabad, Gujranwala, Gujrat, Rahimyar Khan, Multan, Attock Dera Ismail Khan and Peshawar is being sold between Rs 165 per kg and Rs 180 per kg.
A domestic cylinder costs Rs 2,050 in Gilgit-Baltistan, Fata, Balakot, Murree, Swat and Muzaffarabad, while in cities Rawalpindi/Islamabad and Attock a domestic cylinder price is available Rs 1,820. In Peshawar, Dera Ismail Khan, Kohat, Sukkur, Rahimyar Khan and Sadiqabad a domestic cylinder costs Rs 1,750. In Jhang, Sargodha, Sahiwal, Multan, Gujrat and Gujranwala the commodity is being sold at Rs 155 per kg, while in Karachi it is available at Rs 150 per kg.