December 27, 2006	Wednesday	Zilhaj 05, 1427

KARACHI, Dec 26: After smelling demand spurt ahead of Eid-ul-Azha, market players and stakeholders have become active in minting money from consumers by raising the price of liquefied petroleum gas (LPG) to Rs43-44 from Rs39-40 per kg in just one day.

As the Eid falls on Monday, the consumers are likely to receive more jerks in the shape of price-hike.

However, the government is now watching the situation silently instead of protecting the interests of consumers.

Prior to this latest increase, the government did not check the market position as consumers were not provided any relief in gas prices even after the removal of five per cent customs duty on import of LPG.

On Dec 6, the Economic Coordination Committee (ECC) came out with a decision of linking the local base stock price of LPG with the Saudi contract price, which the market players believe, would further enhance the LPG rate by Rs6,000 to Rs8,000 per ton in future -- an increase of Rs8 per kg.

An LPG distributor linked the current price-hike to the increase in cylinder price (11.8 kg) by the LPG marketing companies to Rs450-460 from Rs425 in view of rising demand in winter and upcoming demand on Eid. He said the government’s decision would only benefit a few local producers-cum-investors while the consumers would be the losers. The current landed cost of imported LPG comes to Rs48,000 per ton while 1,600 tons is being produced daily in Pakistan. Only 4,000-5,000 tons is being imported annually to meet the demand and supply gap. The government believes in liberalizing the local market to remove the supply constraints from local producers.

Meanwhile, a local refinery official said the producers have not increased the rate yet.

On the contrary, a distributors’ body, led by Irfan Khokar in the Punjab, had threatened to suspend the LPG supply on Jan 3 over the ECC decision. However, the Karachi-based LPG Distributors and Welfare Association’s chief Hadi Khan showed his organisation’s disassociation from any gas supply cut next month.

“We believe in holding negotiations with the government first rather than going on any strike or suspending supplies,” he added.