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ISLAMABAD: Dealers have expressed concerns over imposing Regulatory Duty (RD) on import of Liquefied Petroleum Gas (LPG), as it would not only increase the fuel’s price but the decision could also lead to LPG shortage in the country during winter.

The All Pakistan LPG Distributors Association on Saturday announced to hold a country-wide protest strike on Saturday, Dec 9, against the decision to impose RD on LPG imports.

The Economic Coordination Committee (ECC) on Nov 28 decided to impose Rs4,669 per tonne RD on imports of LPG, and the ECC noted that the step would help maintain parity between the prices of imported and locally produced LPG.

Earlier, the government had imposed petroleum levy amounting to around Rs7 per kilogram on locally-produced LPG, effective from Nov 1.

However, the LPG dealers have lamented the decision on the grounds that RD on imported LPG would make the imports costlier, as the rates rise in winters.

“The situation would give undue advantage to the local producers as their prices do not increase with the arrival of winter and as a result the local producers are in a position to exploit the market,” said Irfan Khokhar, chairman of the association. “We have started to coordinate with relevant associations and sectors to ensure that there was a strike on Saturday Dec 9 against this new taxation on the LPG.”

Currently, LPG was being sold at Rs130 per kilogram in Rawalpindi and Islamabad, which could increase further as demand rises as the mercury level drops in coming days.

LPG is not only consumed as fuel for small industries but also for burning and heating by domestic and commercial users, as well as auto fuel mainly by rickshaws and taxis.

The LPG distributers have said that by imposing RD on imported LPG, the government has opened doors of exploitation for the local producers, just as the peak winter time is set to arrive, when there is extremely low pressure of natural gas in certain areas of Punjab and the KP.

The daily LPG consumption in winter months is around 4,500 metric tonnes in the country, but out of it around 2,500 tonnes is met through imported stocks because local production is limited.

The association has stated that 62,117 tonnes of LPG was imported in 2014, which significantly increased to245,578 tonnes in 2015, 513,788 tonnes in 2016, whereas 331,830 tonnes have already been imported in nine months of 2017.

The association has said that only 30 LPG marketing companies have supply quotes from the local producers, 114 companies out of 140 companies are totally dependent on imported LPG.

The LPG dealers association has demanded that the government should lift the heavy taxation on imported LPG, including the premium bonus, signature bonus, RD and levy to reduce its prices during winters.

Published in Dawn, December 3rd, 2017