KARACHI, Aug 11: Price of liquefied petroleum gas (LPG) has touched a new peak of Rs39-40 per kg from Rs38 per kg on August 2. From the first week of July till today
, gas price has registered a rise of 33 per cent.
Last month, LPG was selling at Rs29-30 per kg.
The rising crude oil prices in world markets had forced the refinery operators to jack up prices last month by Rs400 per ton. However, the same refinery operators have again surged the prices by Rs 900-1,000 per ton on various dates ranging from August 10-12.
The refinery people are not ready to accept that the current price hike by them have been one of the main reasons in further price flare up in the markets within two to three days.
"The current price hike by the producers have not been implemented in full spirit and the market people have already raised the prices ahead of any increase made by the producers," a refinery official said. He said the main factor behind the LPG price hike is the rising crude oil prices.
He said that the prices of LPG are going up at a time when market demand usually remains thin. Meanwhile, the chairman, LPG Distributors and Welfare Association, Hadi Khan said that there was a supply shortage of over 200 tons per day from OGDCL. Supplies from Pakistan Refinery Limited (PRL) was also suspended due to shutdown of the LPG unit of the refinery.
Besides, a foreign company has brought four ships carrying 3,000-4,000 tons of LPG each in the last two months while a fifth ship is also reaching here this month, but the product is too costly.
He said marketing companies have raised the prices of cylinder (11.8 kg) to Rs430 from Rs415 in just two days. A few days back, it was available at Rs398. At retail level, the cylinder price ranges between Rs438-439.
Hadi said that LPG prices may stabilize after August 19 when supply of over 200 tons from OGDCL resumes. Pakistan Refinery Limited (PRL) has shut down the LPG unit on August 9 for at least 10 days under an annual maintenance programme.
But the PRL official said that suspension of 35-40 tons per day from the refinery would hardly make any negative impact in the market as major supplies from other refineries are still arriving.
He said that rising global crude oil price was the main reason for increasing LPG prices. LPG producers were bringing the local prices of gas in line with Saudi Aramco monthly contract price.
According to Economic Survey 2003-2004, use of LPG as a domestic fuel is being encouraged to stop deforestation in areas where the supply of natural gas is technically or operationally not feasible.
Presently about 1,000 tons per day of LPG is being produced locally which is being marketed by 22 companies, the survey adds. Work on Jamshoro LPG Extraction Project has been initiated involving an investment of $31 million and is expected to be completed by October 2004 where about 450 tons of LPG will be produced and employment opportunities for about 2,000 people will be made available.
According to the Survey, the production of LPG will therefore increase by 45 per cent which will meet the energy needs of about 500,000 households.
