December 06, 2007	Thursday	Ziqa'ad 25, 1428

KARACHI, Dec 5: The Pak Arab Refinery Limited (Parco) has reportedly received instructions from the caretaker government to reverse its decision on increase in LPG prices.

The company had made an increase of Rs6,684 in the per ton LPG price on Tuesday.

Market sources said that there were reports on Wednesday that the Parco had reversed its decision, and it might come out with a revised price notification on Thursday.

However, a senior official in the Parco who asked not to be named said the company has not yet taken any decision as it had been waiting for the return of its managing director from abroad on Wednesday night.

The official said the company was definitely under pressure after the price increase. He, however, said there was a possibility that government officials might have contacted the MD abroad, and issued him instructions.

“We did not receive any order or instruction from the Ogra or the Petroleum Ministry for reversing prices till Wednesday evening,” the official said.

Parco might have also received pressure from the decision of Jamshoro Joint Venture Company (JJVL), another leading producer of LPG, which reduced the ex-base stock price to Rs35,921 from Rs 39,809 per ton on Wednesday.

JJVL director Fasih Ahmed urged other LPG producers to follow the suit and reduce prices in the interest of end-consumers.

The new LPG base-stock price of Rs35,921 per ton would allow reduction in end-consumer prices as the company has directed its customer companies to ensure that the retail price of LPG does not rise above Rs650 per 11 kg or Rs55 per kg so that the benefit of this price reduction is passed onto end-consumers visibly, palpably and immediately, he added.

On the contrary, LPG distributors have decided not to lift the gas produced by Parco either from Monday or Tuesday next, in case Parco fails to reverse its prices.

LPG Distributors Association of Pakistan chairman Hadi Khan, along with other office-bearers, told journalists at a press conference on Wednesday that because of increase in prices, gas demand did not increase this winter as against the expectations of increase in 350 tons a day.

He added that around 50 per cent of small vehicles running on LPG have now switched over to CNG. Pakistan had imported 39,810 tons of LPG during January-September 2007.

The government had allowed LPG producers to fix prices on a monthly basis after de-linking gas prices from Saudi Aramco Contract Price.

However, Ogra will monitor producer and consumer prices with the objectives that these remain at reasonable level within the parameters of LPG Policy 2006 and the producer price should not exceed the Saudi Aramco CP.