KARACHI, Aug 15: The price of liquefied petroleum gas (LPG) has further surged to Rs57-58 from last week’s Rs46-50 per kg owing to what dealers described as shortage created by distributors coupled with price hike by Oil and Gas Development Corporation (OGDC) by 2,874 per ton (without GST).

Market people anticipate a further price hike in view of rising demand triggered by change in weather. The government is yet to come into action and watching the increase from the sidelines. Consumers who use this fuel for burning purposes suffer most. Rickshaw and taxi drivers are as usual charging increased fares.

Two weeks back, LPG rates were hovering between Rs40 and Rs42 per kg. Distributors blame producers for increasing prices, while retailers hold the distributors responsible for creating artificial shortage by resorting to reduced supplies in the market in order to make windfalls.

In many areas, LPG retailers offer excuses to taxi and rickshaw drivers by saying that they have limited stocks.

LPG Distributors Association Chairman Hadi Khan said a halt in supply from Pakistan Refinery Limited had already caused a stir in the market while the rest of the damage had been done by OGDC by increasing prices.

A cylinder of 11.8kg provided by some marketing companies now costs Rs600-620 as compared to Rs520 last week. Some companies have brought imported LPG and it is available at Rs51,000 per ton, including GST, income tax and import duty.

“Keeping in view the Rs51,000 per ton of imported LPG, the government should now consider waiving duties and taxes on import of gas till the winter season comes to an end. It will help reduce the rate by Rs13,260 per ton and bridge the gap between demand and supply,” he said.

There has always been a disparity in the actual consumption of LPG. The distributors say it ranges between 2,000 and 2,500 tons per day, while the Economic Survey 2005-06 puts the consumption figure at 1,600 tons per day. The distributors say the producers are supplying only 1,400-1,500 tons per day to the market.

Some companies have also imported 4,000-5,000 tons in the last one-and-a-half month, while others have brought 4,500 tons of imported LPG last week.

Mr Hadi claimed that many producers had raised LPG prices to over Rs25,000 per ton. The producers had raised the prices to Rs20,000 from Rs17,000 per ton in April this year. The government had capped the LPG price at Rs17,000 per ton in September 2004.

Pakistan Refinery Limited has been on the annual shutdown for maintenance from August 1 to 28. It supplies only 35 tons per day of LPG to the market.