The Oil and Gas Regulatory Authority (OGRA) has notified an increase in the prices of domestic 11.8kg liquefied petroleum gas (LPG) cylinder by Rs 147.87 and commercial cylinder by Rs 569 for October. In monthly review, the OGRA notified increase in prices of indigenous LPG for current month, as 80 percent demand of LPG is met through local production and 20 percent through imports.
The OGRA has computed the LPG increase after taking into account the Saudi CP prices which registered an increase of $75 per MT in current month. The Saudi CP has increased prices to $430 MT from $355 MT in September. The overall impact has been computed around Rs 25.50 per kg.
"It is strange that OGRA has linked the prices of indigenous gas with imported prices of LPG whose volume in consumption is only 20 percent," Irfan Khokar, founder Chairman of LPG Industry Association Pakistan, told Business Recorder.
"The prices of LPG cylinders will further increase by Rs 30 per kg as OGRA has imposed sanctions on import of Iraqi LPG from (Taftan) Pak-Iran border in winter," Khokar said.
Pakistan is importing around 15000 MT Iraqi LPG from Pak-Iran border near Taftan after payment of certain duties and taxes to the federal government. According to the notification issued by OGRA, the new price of 11.8kg domestic cylinder is Rs 1475.63 instead of Rs 1327.76 and new price of commercial cylinder is Rs 5,677, which increased from Rs 5108 fixed in September.
The OGRA increased the price of domestic cylinder by 10 percent when winter season is at the corner. The LPG is 60 percent cheaper than petrol and diesel, while 15 percent expensive from natural gas, according to experts. On Monday, the OGRA notified the producers' price of LPG (propane 40 percent and butane 60 percent - two components of LPG) at Rs 67,214.83 per metric ton (MT), increased from Rs 56,504.52 per MT.
The producers' price included excise duty of Rs 85 per metric ton, excluding Petroleum Levy. And under this head, the producer price of 11.8kg cylinder has been worked out at Rs 793.13, said the notification. As per the notification, the marketing/distribution margin has been set at Rs 35000 per MT and Rs 413 per 11.8-kg cylinder, a Petroleum Levy of Rs 4,669 per metric ton will be also charged, which is Rs 55.09 for 11.8kg cylinder.
Ex-GST or Prior to General Sales Tax (GST) imposition, the consumer price will be Rs 106,883.83 per metric ton and the 11.8kg cylinder price will be Rs 1261.22. The GST of 17 percent or Rs 18,170.25 per metric ton will be imposed and it will be Rs 214.41 for 11.8kg cylinder.
Final LPG consumer price will be Rs 125,054.08 MT and Rs 1475.63 new price of domestic 11.8-kg cylinder. In routine, around 90,000 MT LPG is consumed every month (including local and imported), but in winter season its consumption is almost doubled for many reasons like load-management on networks of Sui Southern Gas Company Limited (SSGC) and Sui Northern Gas Pipelines Limited.