KARACHI, Jan 21: Consumers are still at the mercy of LPG dealers who are fleecing them, while LPG distributors and marketing companies are trading blames for compelling consumers to pay higher prices.

The government and the Oil and Gas Regulating Authority (OGRA) does not seem to be bothered over the consumers’ vulnerability as no action has so far been taken against the people involved in the black marketing of the product.

LPG has become costlier by Rs50-70 per kg, depending on the area just two days ahead of Eid-ul-Azha. Eleven days later, the price of LPG is still Rs50 per kg in majority of the areas against the declared price of Rs 38-40 per kg.

Distributors and marketing companies had attributed the increase to the situation when demand outstripped supplies before Eid. They had claimed that the prices would come down soon after Eid. This, however, has not happened.

LPG Association of Pakistan (LPGAP), a group of licensed marketing companies, in a letter to OGRA on January 21, dispelled the market impression that the price had been raised by the LPG marketing companies.

The association’s chairman, Iqbal Z. Ahmad said that the producers had not raised their prices since last one year and the marketing companies had kept the prices at reasonable levels. He added that the producers were doing their best to maximize their production.

Giving reasons for the price hike, he said that the demand for LPG is more than its supply despite increase in local production by about 600 tons a day. Historically, LPG prices usually go up on occasion of Eid but come down by Rs10-12 per kg after Eid.

Another reason, he said, is the delay in the notification from the Ogra regarding rules for its use in auto sector despite government’s approval late last year. As a result, decanters continue to fleece the consumers and also continue with their unsafe practices.

Iqbal said Ogra had created a media hype recently that it will allow setting up of LPG extraction plants. He said this proposal has been delayed or permanently shelved with the result that no new LPG plants are being set up which again support price increase.

He said the distributors, particularly, in far flung areas and big cities continue to take advantage of this situation and resorting to hoarding tactics.

The association urged the Ogra to liberalize the import of LPG with sales tax and customs duty to stabilize prices in the local market. It should also issue notification for the rules for auto sector.

On the contrary, LPG Distributors and Welfare Association chairman Hadi Khan said that the distributors had not raised the prices.

“Actually the daily production has come down to 1,300-1,350 tons a day, as against the demand of 1,800 tons a day,” he said adding that the gap between demand and supply lead to black marketing in the domestic market. He said distributors are selling a cylinder (11.8 kg) between Rs450-460.

The only solution to handle the black marketing in rates is the liberal import of LPG in winter season without sales tax and customs duty in order to offset the negative impact of rising international prices and to control the domestic prices, he said.

Rickshaw and taxi owners are charging phenomenal fares from the consumers on the back of rising LPG prices.

Besides, vehicle owners, many people use this gas in their homes for cooking purpose, while many restaurants, hotels and sweet sellers also use LPG.