April 04, 2007	Wednesday	Rabi-ul-Awwal 15, 1428

ISLAMABAD, April 3: The Oil and Gas Regulatory Authority (Ogra) on Tuesday fixed the maximum base stock price of liquefied petroleum gas (LPG) at Rs30,716, down by about 3.8 per cent from Rs31,949 per ton.

Chairman of the LPG distributors association, Irfan Khokhar, however, said in a statement that despite a reduction approved by the regulators, the LPG marketing companies have increased prices by about Rs25 per household cylinder or Rs96 per ton at the rate of Rs2.15 per kg.

In its notification issued here, the Ogra said the prices of Propane and Butane (two components of LPG) have reduced from $526 per ton to $506 per ton owing to a reduction in the prevailing FOB contract prices of Saudi Aramco.

The base stock prices of LPG have been linked under a Dec 6 decision of the Economic Coordination Committee (ECC) of the cabinet last year at par with import parity price, apparently to overcome its shortage and black-marketing. The domestic prices were thus linked to Saudi Aramco prices.

The LPG production prices have increased from 17,000 per ton in April 2005, up by more than 80 per cent mainly because of an earlier decision of the government to allow use of LPG in motor vehicles that had remained a crime under the old laws because of safety considerations.

Mr Khokhar said the LPG marketing companies were continuously increasing prices despite some reductions allowed by the regulators in the last two months.

He accused the LPG marketing companies of pocketing over Rs90bn as unjust profit while the government and the Ogra did not take any notice of the situation.

He said the LPG marketing companies had forced out over 1,000 distributors from the business, resulting in huge shortages in the far-flung areas of the country.

The marketing and retail price of LPG is a totally deregulated regime and the marketing companies are free to fix their own retail prices.