KARACHI, Dec 7: Distributors and marketing companies ruled out any big relief to consumers with regard to LPG prices after the government decision to abolish five per cent customs duty on liquefied gas import.

They say that the consumers will see Rs1.8 to Rs2 per kg cut in gas rates at the retail stage, which cannot be termed as a real benefit to the consumers.

On Thursday, there was no fall in LPG prices in the markets, which were selling gas between Rs39-40 per kg.

Chairman LPG Association of Pakistan (a body of 42 marketing companies), Iqbal Z Ahmed told Dawn from Lahore that he could anticipate only Rs1.8 per kg cut in prices.

“Prices could have been fallen more sharply if the government would have abolished the 15 per cent general sales tax and six per cent income tax on imports,” he said adding that the association had recommended this to the government in order to provide real relief to the consumers in winter season.

He said currently the demand of LPG has been slow due to ample supplies coupled with the late start of winter season. Production of LPG is currently 1,600 per tons daily. Out of this 40 per cent is consumed by rickshaws and taxis, while 60 per cent is used by consumers for burning purpose mainly in rural areas, he said.

Chairman LPG Distributors and Welfare Association Hadi Khan said that the consumers will not see any major benefit in terms of price cut. He calculated Rs2 per kg cut in prices.

He added that the government had not considered the association’s demand of abolishing GST and income tax on import of LPG, which would have really provided a relief to the consumers.

There is no comparison in prices between locally produced LPG and the imported gas.

He added that the locally produced gas was available at Rs28,847 per ton, while the landed price of imported LPG comes to over Rs40,000 per ton. Only Rs1,700-1,800 per ton has been eroded in the shape of duty abolition.

Some companies have imported around 42,000 tons of LPG from various countries during January to December 6, 2006. “The government should have abolished the GST and income tax on temporary basis in order to provide relief to the consumers,” he said. A LPG producer in a local refinery said the government should ensure that the market players pass on the impact of duty relief to the consumers.