KARACHI, Nov 10: A local company has signed an agreement with a foreign company to import 10,000 tons of liquefied petroleum gas (LPG) aimed at easing gas prices currently hovering between Rs48-50 per kg.

Jamshoro Joint Venture Limited (JJVL) has signed an agreement with a Singapore-based company Petrodec in the first week of November for supply of 10,000 tons of gas, and the first ship, carrying 2,000 tons of gas, is expected to arrive at the Port Qasim in the next 24 hours.

The next 8,000 tons will arrive in the next 60 days, Chairman and Chief Executive of JJVL, Iqbal Z. Ahmed told Dawn from Lahore, adding that most of the imported gas would be consumed in Karachi where prices have been persistently touching new peaks for the last few months.

The imported gas will cost Rs520 per cylinder (11.8 kg) after paying all government levies and taxes, he said.

When asked as what benefit a common man would get from the costly imported LPG as far as price is concerned, he said his company has given a proposal to the government that JJVL is ready to subsidise the cost of gas by $120 per ton provided the government allows the company to export equivalent quantity of gas in summer season when gas demand usually remains low.

He said he had also given a formula: Saudi contract price plus freight premium minus $120 per ton. If the government accepts this formula, the imported gas would cost Rs400 per cylinder as compared to Rs520 with full duty and taxes. Currently, LPG cylinder in Karachi is selling at Rs540-550.

In another suggestion, he said that if the government allows export of LPG then the present imports shall be treated under the import/export rules of the country which permit deferment of the duties to the advantage of common man.

If the government does not pay any heed to our proposals, the company will market the gas by mixing it with locally produced gas, Iqbal, also chairman of LPG Association of Pakistan (an association of marketing companies), said hoping some price stability in the markets.

Pakistan produces 1,000 tons of LPG daily in which Punjab consumes 50 per cent alone followed by 25 per cent in Karachi, 30 per cent in NWFP, Northern Areas, Azad Jammu Kashmir and five per cent in Balochistan. Main producers are Parco with 400-450 tons a day, 200 tons per day by OGDCL and 400 tons by Pakistan Refinery Limited, National Refinery Limited, Pakistan Oil Field and Orient Petroleum Incorporated.

He said JJVL is also starting production of 500 tons of LPG per day from the end of December. Besides, Boby field of OGGDL has started its trial production of 150 tons a day while production of 50 tons from Chanda field of OGDCL will get under way from middle of 2005 and 40 tons by OPI in first quarter of 2005.