January 11, 2006	Wednesday	Zilhaj 10, 1426

KARACHI, Dec 10: LPG retailers are charging Rs50-60 per kg from consumers as against Rs40 two days back, despite the fact that LPG companies and producers have not raised prices.

“Majority of dealers have either closed their shops or in case some of outlets are open, they are charging Rs50-60 per kg for LPG,” some rickshaw owners complained.

“We do not know what is going on. Even a dealer is reluctant to give gas in large quantities. It is hard to get even one kg gas from the dealer,” a rickshaw owner said.

“In some areas, LPG is being sold at Rs80-90 per kg,” claimed another rickshaw owner.

The LPG retailers, however, said that they were bound to charge higher price as either gas was not available in the city or selling at exorbitant rates.

However, LPG Distributors and Welfare Association Chairman Hadi Khan claimed that LPG companies had raised the price of 11.8kg cylinder to Rs425 from Rs415, while distributors were selling it at Rs460 as against Rs450 per cylinder sold a few days ago.

By this calculation, the retail price comes to Rs39 per kg, while LPG company rate is about Rs36 per kg. The LPG should not sell over Rs42 per kg at retail stage, he said.

He said the demand for LPG had increased in the quake-affected areas which are in grip of severe cold wave and snowfall. On the other hand, supply from the producers has fallen, leading to a gap in the demand and supply situation.

Like always, the situation is fit for vested interests who know the art of making most out of such situations.

Mr Hadi said there had been a slowdown in production of some producers but it was hard to quote the actual figures of decline in production.

The production of LPG in Pakistan has increased to 1,500 tons a day from 1,000 tons in the last one year since the arrival of gas from Jamshoro Joint Venture Company Limited (JJVL) and other fields.

An official at a local refinery said that the refineries had not made any change in prices as the government had already capped the LPG price at Rs17,000 per ton in September 2004.

On the contrary, LPG Association of Pakistan (LPGAP) Chairman Iqbal Z. Ahmed said: “The marketing companies have not raised a single penny as claimed by Mr Hadi Khan.” Besides, JJVL has also not slashed any production. Four days back, the production of LPG had come down to 367 tons a day from 400-450 a day in normal days. Currently, the plant is producing 416 tons a day. Besides, none of the producers had so far reduced their production, he added.

He attributed the increase in gas price to an artificial phenomenon caused by rising demand in Eidul Azha and Eidul Fitr season. It happens every year and the situation will return to normal after Eid, he adds.

On Mr Hadi Khan’s view that LPG is in high demand due to increased supply to the quake-hit areas, Iqbal Ahmed said the daily consumption of LPG in the quake-affected areas was estimated at 250 tons a day prior to the October 8 disaster. Now the consumption has declined to 50 tons in the same areas as everything from houses to shops have destroyed, besides massive human casualties. How could a demand surge be there when there remained a very few users, he asked.

Iqbal Ahmed, who is also chief executive of JJVL, said that so far the company had provided 20,000 LPG cylinders free of cost to the government after the Oct 8 tragedy as against the target of 50,000 cylinders in order to ensure gas availability throughout the winter.

He said the import of LPG had been suspended after an increase in the world market. In case sales tax and customs duty is not charged, the imported LPG would cost Rs600 per ton.