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| August 17, 2006 | Thursday | Rajab 21, 1427 |
LPG firms earning Rs235-285 per cylinder
LAHORE, Aug 16: The LPG marketing companies are earning whopping profits in the vicinity of Rs235-285 per domestic cylinder of 11.8kg by selling the liquefied gas at its import price of Rs575-625 per cylinder.
Companies are said to have raised their rates by Rs225-275 per domestic cylinder during the last one year from Rs350 as compared to an increase of Rs109 per cylinder by producers. Local LPG producers have increased their prices to about Rs340 (OGDC rate) per domestic cylinder from Rs231 during the last one year.
LPG distributors claim that the marketing companies have raised their prices to import price (Rs52,000 per metric ton) of liquefied gas without actually importing it. As a consequence of the exorbitant increase in the prices by both local producers as well as marketing companies, domestic consumers have to pay an additional Rs200 per cylinder as it is currently available for more than Rs700 as against Rs508 in August last year.
“It is high time that the government should make the OGDC to withdraw the increase of Rs9,204 per metric ton effected in the last four months since April and start monitoring both local and import rates of LPG in the market to prevent marketing companies from fleecing consumers,” LPG Distributors Association Pakistan chairman Irfan Khokhar told this reporter on Wednesday.
Besides, he said, the government should take early steps to import LPG to fill gap between supply and demand. He said the LPG demand was expected to rise to 3,000 metric tons per day from the current daily consumption of 1,600 metric ton with the advent of winter. The expected shortfall during the next five months (Sept 06-Jan 07) is estimated to be 162,000 metric ton.
“If LPG producers are not made to withdraw 30 per cent increase in their prices and if marketing companies are not stopped from selling local gas at its import price, the consumer price would go up to Rs100 per kg from the current Rs57-58 in coming months,” Mr Khokhar warned.
Besides, he said, it was critical to import LPG in sufficient quantity over the next few weeks to bridge the gap between its supply and demand to stabilise the market and protect domestic consumers. In order to facilitate immediate import of LPG, he demanded, the government must remove 28 per cent import duty. He also urged the government to monitor the shutdown schedule of refineries in order to ensure that the LPG supply from domestic sources did not drop.
“If the increase (of Rs9,204 per metric ton over the last four months) in the LPG price by producers is not withdrawn immediately and if the marketing companies do not stop charging import price for the local liquefied gas, the distributors and retailer will have no option but to pull down their shutters,” he said.
Asked the LPG distributors and retailers were also charging high margins from end users, he sought to dispel the impression.
“Our rates include our profits as well as the cost of transportation from the plants of marketing companies located in different, sometimes far-off areas,” he said.
According to him, both the distributors and retailers each were earning around Rs52 per domestic cylinder, up from Rs26 in August last year.
“Compared with the margins of Rs235-285 per cylinder being made by marketing companies, the distributors and retailers are making very reasonable profit,” he said.
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