November 18, 2007	Sunday	Ziqa’ad 07, 1428

ISLAMABAD, Nov 17: The Liquefied Petroleum Gas (LPG) distributors have appealed to the caretaker Prime Minister, Mohammadmian Soomro, to detach base price of local production from the international market in a bid to pass on benefit to end consumers.

The demand came in the wake of highest-ever increase in the price of LPG by linking the base price of local stocks with the international market since Jan 3.

The consumer price of each cylinder was in the range of Rs600 to 700 at the end of October 2007. In December 2006, the average price of each cylinder was Rs510.

LPG Distributors and Welfare Association chairman Hadi Khan in a statement issued on Saturday said the caretaker government would take some practical steps for arresting the steady increase in LPG for the last few months.

The LPG price increased to Rs23,873 per ton during the last five years. This means the per kg LPG price was up by Rs24 while an 11.8 kg cylinder witnessed an increase of Rs275 during the period under review, he added.

He said local LPG production stood at 0.51 million tons during the first 10 months of the current calendar year while only 39,810 tons was imported during the same period.

The low imports clearly indicate that there was no justification of linking local price with international market, he added.

He urged the caretaker setup to at least freeze the base price at the rate of September 2007 for the time being to pass on some relief to consumers, particularly those of northern areas who use LPG as a source of heating in the prevailing chilly weather.Mr Khan said that the ill-advised policy of the former government led to closing down of businesses by many people involved in the LPG industry.

Many potential investors also abandoned their plans for expansion in the sector.

He further disclosed that around 13 to 15 new intended companies also dropped their proposals for making investment in the sector.

This high price discouraged import of LPG to bridge the gap between demand and consumption.

This additional demand, coupled with lower than expected production due to shutdown or poor performance of local production sources, had pushed LPG retail prices to historic highs, he said.

A total of 1,600 tons of LPG is being produced in Pakistan daily, and the total local production has reached 48,000 tons per month. Only 4,000 to 5,000 tons is being imported annually to meet the demand and supply gap.