KARACHI, Aug 7: As the weather changes from the next month, market players have become active in pushing up prices of liquefied petroleum gas (LPG) that surged to Rs46-50 from Rs40-42 per kg last week.
Like past practice, retailers blame distributors for curtailing the supply while the distributors attribute the increase to a decline in production.
Market people anticipate a further increase in prices when demand peaks up during the start of winter season from September. And in case of constant supplies from the local producers, there is hardly any chance for a big leap in prices.
The consumers who use LPG as a burning fuel are now paying high prices, while taxi and rickshaw owners are now demanding extra money from the passengers after buying LPG at increased rates. The ultimate sufferers are consumers, as the market players pass on the impact to the end-users.
LPG Distributors and Welfare Association Chairman Hadi Khan attributed the price hike to a decline in supply from Pakistan Refinery Limited (PRL) on account of annual shutdown for maintenance or any other reasons. He said daily consumption of LPG ranged between 2,000 and 2,500 tons against the production of 1,500 tons per day. At present the producers are supplying 1,400 tons per day.
Mr Hadi said the demand for LPG was increasing, as a number of taxis and rickshaws had emerged as the big consumers of this fuel. He said some companies had also imported 4,000-5,000 tons of LPG in the last one-and-a-half month and its price was tagged at Rs625 per 11.8-kg cylinder and added that some others were also importing 4,500 tons of LPG this month.
Mr Hadi urges the government to allow duty-free import of LPG till January 2007 so that the price could be maintained in the winter season when demand usually outstrips supplies. He maintained that the demand for gas had increased in the quake affected areas where people living in camps and makeshifts used this cheaper mode of fuel.
Mr Hadi claimed that the producers had increased the price of LPG to over Rs25,000 per ton some 15 days back. They had raised the price to Rs20,000 from Rs17,000 per ton in April this year. The government had capped the LPG price at Rs17,000 per ton in September 2004.
According to the Economic Survey 2005-06, the use of LPG as domestic fuel was being encouraged to impede the ongoing deforestation in the areas where supply of natural gas was technically or operationally not possible. The survey claimed that the production of LPG had reached 1,600 tons per day as compared to 1,000 tons per day last year. LPG is also being used as motor fuel in many urban centres, including Karachi, Lahore, Faisalabad, Gujranwala and Rawalpindi.
Meanwhile, a PRL official said the refinery was shut down for maintenance from August 1 to 28. “PRL produces only 35 tons of LPG per day, so there is no need for any panic in the market created by the distributor’s body that the price has gone up due to shutdown of the refinery,” he added.He also rejected the distributor’s body claim that the producers had increased the price and added that price of LPG stayed at Rs20,000 per ton.
