September 19, 2006	Tuesday	Sha'aban 25, 1427

KARACHI, Sept 18: Consumers may have to pay Rs5 to Rs10 per kg more for liquefied petroleum gas (LPG) in coming days following Rs3,720 per ton increase made by Oil and Gas Development Company (OGDC) on September 16.

In the middle of August 2006 the OGDC had raised the rates by Rs2,874 per ton pushing its retail prices to Rs57-58 from Rs46-50 per kg. In early August the LPG was being retailed at Rs40-42 per kg.

The latest increase in LPG prices has come at a time when Ramazan is just around the corner and the City Government has already fixed the rate for sweet and nimko for the holy month. The majority of nimko and sweet makers use LPG as fuel to burn their gas hobs.Nimko and sweet dealers who are well-organised and situated in the main markets may not increase the rates because of fear of raids by the government officials. But retailers in the residential areas will fully utilise the situation by charging higher rates as they usually remain unchecked.

It is surprising that the public sector company(OGDC) has increased the rates which may trigger increase in rickshaw and taxi fares besides raising the cost of nimko-related items whose demand peaks in the holy month.

Nimko and sweet sellers may demand revision in their prices when they will procure gas at higher rates. Besides, commuters will have to bear extra fares for taxi and rickshaw when they will throng the markets for Eid shopping.

The LPG rates currently hover around Rs54 to Rs55 per kg and it is expected to hit Rs60-65 in coming days in case LPG marketing companies come out with fresh increase, a LPG dealer in Korangi area said.

Besides, LPG demand also goes up in the winter season and the producers and marketing companies know how to cash the situation. Consumers who use this fuel for burning purposes suffer the most.

LPG Distributors Association chairman Hadi Khan said so far a cylinder of 11.8-kg was available at Rs600-610 but the rate would go up when other LPG marketing companies raise their prices. “Currently the demand is slow but it will increase during Ramazan and winter season,” he added.Some companies have imported 21,430 tons from January 2006 till September and it is available at Rs49,270 per ton.

“If the imported LPG would have not landed then the rates would surge phenomenally,” he said, urging the government to waive duties and taxes on import of gas during the winter season. “It will help reduce the rate by Rs13,260 per ton and bridge the gap between demand and supply”.

There has always been a disparity in the actual consumption of LPG. The distributors say it ranges between 2,000 and 2,500 tons per day, while the Economic Survey 2005-06 puts the consumption figure at 1,600 tons per day. The distributors say the producers are supplying only 1,400-1,500 tons per day to the market.

The producers had raised the prices 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.