KARACHI, Aug 2: Price of liquefied petroleum gas (LPG) has further gone up to Rs38 from Rs34-36 per kg in just 15 days. Earlier in July, the LPG was available at Rs29-30 per kg.

In just one month, the gas had become costlier by 26-31 per cent.

Refinery operators said that the producers had increased the prices last month which had been passed on to the consumers by the marketing companies. They said, "the producers have not further raised the prices of gas recently. Marketing companies and retailers are in a better position to give the reasons of price flare up."

The actual reason behind the increase was rising international oil prices but so far a very negligible portion of the hike had been passed on to the consumers by the producers and a sizeable portion of the world oil price hike had been absorbed by the producers, they added.

Operators said that gas prices would have gone wild and beyond affordable levels in case the actual increase of world oil prices has been passed on to the end-users. Meanwhile, market sources said that the retailers were playing the game in the market by charging prices on their own, linking the price hike to shortage of LPG gas in the market.

Many retailers were now engaged in hoarding the gas in order to make pocket huge profits in another few days. However, refinery operators said that there was no supply restraint from any side and production of gas was being going on swiftly.

They said the LPG prices were likely to stabilize when the production of 40 tons a day would arrive in the market from Chanda - a new gas field of Oil and Gas Development Company Limited (OGDCL).

OGDCL had started producing oil and gas from its Chanda field in district Kohat from July 17, which was the first ever discovery of hydrocarbons in the North West Frontier Province (NWFP).

Initially the company would produce 10 mmcfd of gas and 2,000 barrels of oil per day, rising to 13-15 mmcfd of gas and 3,000 barrels per day of oil in future. On completion of second phase of the project, OGDCL would subsequently also produce 40 tons of LPG per day.

If compared the OGDCL's LPG production with 900-1,000 tons per day production of LPG in Pakistan - then the share comes to four per cent, an analyst said.

OGDCL was already producing LPG in a market in which the share of Pak Arab Refinery Limited (Parco) stands at 45 per cent alone in country's total production, while other producers include Pakistan Petroleum Limited, coastal refineries like PRL, National Refinery Limited (NRL) and Attock Refinery Limited (ARL) and other oil fields.

Dhodak produces 190 tons a day. A refinery operator said that the arrival of 40 tons a day from OGDCL would help some what bridge the gap of demand and supply in the winter season when demand peaks up in Northern areas where people use LPG as an alternate fuel for burning purpose instead of kerosene oil and lack of natural gas availability in the areas.

Last month the LPG producers had brought the local prices of gas in line with Saudi Aramco monthly contract price. LPG prices are linked with the international prices. Producers have increased the domestic prices by Rs350-400 per ton in July.

As a result of the hike in world prices the importers were also reluctant to take the risk of bringing costlier gas from abroad. Besides sizeable household demand of gas in northern areas, LPG is also being consumed by a number of rickshaws and taxis due to a reasonable saving if compared with petrol.

Many rickshaw and taxi drivers who mostly demand verbally exorbitant fare from the passengers instead of running the vehicle on the meter, are now demanding extra Rs10-20 from passengers to cover up the rising cost of LPG.