ISLAMABAD: Reduction in the price of Liquefied Petroleum Gas (LPG) is on the cards as ministry of petroleum and natural resources has devised a formula under which per kilogram price of the commodity would witness decrease by up to Rs108 if it is fixed at Rs Rs92.50 per kilogram across the country.

Available copy of official documents also disclosed to Dawn that petroleum ministry has floated a formula in its summary to the highest economic forum, Economic Coordination Committee (ECC), to set the price of commodity at Rs92.50 per kilogram for all parts of the country by fixing it at Rs92,529 per ton. And, in this manner, per kilogram price of LPG can be reduced between Rs50 to Rs108. As a result, domestic cylinder will be available at Rs1,092 across the country.

It is pertinent to note here that price of LPG during summer season goes up by up to Rs150 per kilogram and in winter it witnesses new high by shooting up to Rs200 kilogram, adding woes to the people of remote and hilly areas where the commodity is used as a fuel for cooking and lightening purposes.

About setting the margin of LPG distributors and marketing companies, the ministry has proposed to fix it at Rs626 per cylinder, while Rs307 per cylinder for marketing companies, and Rs159 as General Sales Tax (GST) on the sale of LPG.

Under the proposed LPG Policy 2014, Oil and Gas Regulatory Authority (Ogra) will issue price notification as the price will be regulated, and there will be the imposition of petroleum levy (PL) and Gas Infrastructure Development Cess (GIDC) on local LPG Producers, while the collected amount under PL and GIDC will be used for giving subsidy on imported LPG so that price of foreign and local LPG can be sold on same price across the country.

“Taking cognisance of the issue, MPNR has achieved the issue in its entirely and has concluded that price deregulation policy has failed to achieve intended objectives of availability of the products at affordable prices. LPG is considered poor’s man fuel, yet the same is being priced at over 20 times higher than natural gas for domestic consumers. Since 2000, the domestic LPG market has been experiencing various challenges including demand supply imbalance, cartelisation, litigations and price distortion,“ petroleum ministry’s summary said.

When contacted spokesman petroleum ministry, he confirmed the information and said that in a bid to regulate the price of LPG, petroleum ministry has dispatched a summary to ECC for necessary approval to give an end to the policy of deregulation of LPG price, which in accordance to the ministry has become inevitable to make an end to the cartelisation causing price hike, fleecing of poor masses, and also to save fast decaying forests of the country. Moreover, LPG Price Deregulation Policy 2000 has been unfortunately failed in achieving its target. It was launched with a view to promote competition in its business besides making it an investment friendly sector. Also, the petroleum ministry has sought approval to LPG Policy 2014.

He was of the view that uniform price of LPG will contribute towards minimising the intensity of ongoing gas crisis in the country and there will be low pressure on the systems of Sui Southern Gas Company Limited (SSGCL) & Sui Northern Gas Pipelines Limited (SNGPL).

It was also believed among the senior officials that with effect to the new LPG policy 2014, import of the commodity will be in abundance in the country and as a result to which industries will also get benefit from it.

The ministry’s recommendation comes days after Ogra issued a notification imposing a ban on the usage of LPG in public transport vehicles.

Ogra’s measure was approved by the federal government.

The regulatory authority had termed the usage of LPG as illegal and had said that buses, coaches, wagons, auto rickshaws and motor cycles would be restricted in using it as means of fuel.

In Pakistan, LPG is being widely used in auto rickshaws as it is considered a cheaper source of fuel in comparison with the mileage provided by its counterparts petrol or diesel.