ISLAMABAD: The government on Friday agreed to Liquefied Petroleum Gas (LPG) distributors’ demands for fortnightly price notifications and fixing of margins for marketing, distributions and transportation.

The decision was taken at a meeting presided over by Special Assistant to the PM on Petroleum Nadeem Babar and attended by representatives of the Oil and Gas Regulatory Authority (Orga), the Petroleum Division, LPG associations and retailers.

The meeting also concluded that the transportation cost for far-flung and hilly areas would be notified separately to ensure that prices remain stable with sufficient supplies at all times.

After the meeting, the All Pakistan LPG Distributors Association’s Ali Haider and LPG Industries Association’s Irfan Khokhar said the Petroleum Division would move a summary to the Economic Coordination Committee (ECC) of the Cabinet by next week to implement the agreements reached at the meeting.

Under the agreement, Ogra would immediately start notifying LPG prices on a fortnightly basis. The margin for marketing companies would be set at Rs15,000 per tonne and Rs10,000 each for distribution and transportation.

At present, the overall marketing margin was set at Rs35,000 per tonne but in the absence of its bifurcation, the marketing companies and dealers blamed each other for price increases.

The distributors told the government that this lump sum margin being calculated by Ogra was the major lacunae letting marketing companies to take advantage in profit taking while distributors faced crackdown by district administrations due to higher than sale price notified by the regulator.

Under the agreement, the government also agreed to come up with a comprehensive policy for fair treatment of local and imported LPG in price fixation besides announcing projected demand for imports for next three months.

Under the policy, the government would either fully regulate the price of imports or deregulate the price of domestic LPG but it would not leave two systems — regulation of domestic products and unchecked marketing of imports — of the same product. The quality and quantity of both imported and domestic LPG would also be monitored on similar specifications.

It was also unanimously agreed that cross-filling of cylinders and substandard quality would be completely banned. Ogra would also ensure separate price notification for different stations in Azad Kashmir, Gilgit-Baltistan, Chitral, Malakand, Hazara and FATA divisions and ex-plant price would be affixed on cylinders at the time of vehicles exiting the LPG plants.

Published in Dawn, April 11th, 2020