June 29, 2008	Sunday	Jamadi-us-Sani 24, 1429

KARACHI, June 28: The price of liquefied petroleum gas (LPG) will further go up to Rs62 per kg as LPG marketing companies have again raised its rates.

The 11.8kg cylinder would now be available at Rs665-670 as against its earlier price of Rs630-640 four days back.

Consumers would have to see another price-hike when five per cent gas development levy (GDL) and one per cent increase in GST would come into effect on July 1.

Mr Hadi Khan, Chairman, LPG Distributors Association of Pakistan, said that the marketing companies were taking full advantage of low production of gas as they have made an increase of Rs30 on 11.8 kg cylinder or Rs3 per kg.

The gas price in Karachi has already increased by Rs3 per kg to Rs56-58 per kg from Rs53 per kg. In Lahore, the price of gas is Rs60 per kg. The price increase had been made owing to production shortfall of 300-400 tons a day.

Fasih Ahmed, a spokesman for LPG Association of Pakistan (LPGAP), a grouping of all LPG marketing companies, said that markets in Punjab have no problem of short supply, but the Karachi market is currently facing a supply constraint owing to 400 tons shortfall, caused by the closure of some four to five production units.

He said that the LPG price would rise further by Rs3 to 4 per kg when GDL and one per cent sales tax would be enforced on July 1.

He said that currently the daily supply from producers had only been 1,200 tons a day.

He said that earlier around 200 tons of smuggled Iranian LPG had been catering to the needs of the country, but now illegal trade from the neighbouring country had almost stopped. It might have been one of the reason of shortfall in Karachi.

Hadi Khan said that during the last two months, the LPG price had surged by Rs17 a kg. He added that the government appeared least bothered about the rising gas prices by the marketing companies.

He said that producers had lowered their production and it was being assumed that the producers had been trying to link producers’ price to Saudi Aramco Contract Price again. He urged the prime minister to take notice of the rising LPG prices. Hadi was of the view that smuggling of LPG from Iran would now restart as local rates are going up.

When LPG was being sold at Rs45 a kg at retail two months back, Iranian gas used to arrive at Rs33 per kg. However, its share in the market is dwindling due to increase in LPG prices in Iran.

He said now local rates would cross Rs62 per kg and smugglers would have enough chance to bring gas from the neighbouring country even if it costs them Rs50 per kg.