The government is now trying to convince the CNG sector to switch over to LPG.

Apart from the statement to this effect being made by Dr Asim Hussein, the adviser to the prime minister on petroleum, the new proposed policy guidelines for gas also include a clause suggesting that the LPG would replace the CNG as a vehicle fuel.

This clause in the draft policy follows the suggestion that CNG be eliminated as a key fuel for vehicles and limit its usage to certain category such as the public transport.

LPG has been called ‘autogas’ because it is used to run vehicles in many countries of the world. However, in Pakistan it is not commonly used. In fact, there are only three LPG filling stations in the country which do not see much business.

Liquefied Petroleum Gas (LPG) has witnessed a phenomenal growth of over 100 per cent in the past decade.

However, it remains only one per cent of the total energy mix in the country and even the officials of petroleum ministry estimate that LPG should be at least five percent of the energy pie.

“LPG is consumed by rickshaws and loading vehicles in Karachi,” said Hadi Khan, chairman All Pakistan LPG Dealers Association, “But they get their cylinders filled at the decanters.”

Decanting is illegal because of the dangers involved with the transfer of LPG from a large cylinder to a smaller one for retail sale.

Despite several accidents, the authorities have failed to offer any alternative to this unsafe method.

LPG is retailed all over the country through this method.

However, what is worse is that the LPG stakeholders say that they are being dragged into a political tug of war and that the government is doing little to encourage LPG use except for spouting rhetoric.

“The decision to shut down CNG has been made by the government. It is not our fault,” said Irfan Khokhar, Chairman LPG Distributors Association of Pakistan. “The authorities are not doing anything significant to promote the LPG.”

“LPG consumption is limited to cooking and heating,” said Belal Jabber, spokesman LPG Association of Pakistan. He was of the opinion that over the next decade the consumption of LPG will grow only if the government announces an acceptable policy.Pakistan announced an LPG Policy in 2001 and then in 2006 after due consultation with stakeholders but these failed to kick start the sector.

There was another LPG Production and Distribution Policy 2011, which was supposed to promote import of LPG by the producers to enhance its supply.

The LPG policy 2011 also empowered the government to collect Petroleum Development Levy (PDL) to subsidise import of LPG. But the policy did not materialise as the producers went into litigation.

However, the government approved another LPG policy on January 1, 2013.

The LPG (Production and Distribution) Policy Guidelines 2012 were notified but there are chances that it too could end up in litigation.

The LPG policy 2012 grants monopoly to the state owned gas utility companies - SNGPL and the SSGC - to extract and obtain LPG from the government owned fields.

In other words, the government is trying to promote the SSGC and the SNGPL to establish their own LPG marketing company but this may backfire as the private sector is now feeling threatened.

It feels that if the government encourages the public sector to enter the field, the private sector may be forced out in the future.

“With such erratic changes how can one invest in autogas,” said Mr Jabbar.

On the other hand the distributors have also announced to challenge the LPG policy 2012 if the PDL levied on the producers is passed on to the consumers by them.

A third major problem is that LPG prices vary with the change in weather. The government has failed to address this situation but so far nothing has worked.

The current price of LPG is around Rs200 per kg in the federal capital.

This means that at the moment, it will prove more expensive than petrol if used in vehicles.

Till this price is brought down, LPG will probably not replace CNG.