KARAHCI, Feb 16: As a result of an intense competition among some LPG marketing companies to reduce prices consumers are likely to benefit with the LPG prices coming down to Rs46 per kg in next few days from the current Rs51-52 per kg.

Some marketing companies, which hold the major share in the market, have slashed the price of 11.8 kg LPG cylinder to Rs475-480 from Rs550 in just one day but distributors anticipate that the on-going competition between the marketing companies appears to be a temporary move.

Chairman LPG Distributors and Welfare Association (LPGDWA) Hadi Khan said that the distributors will provide the gas at Rs510 per 11.8 kg cylinder to the consumers after cut in rates by some marketing companies.

He said the cost of imported LPG comes to Rs46,500 per ton while the locally produced LPG is priced at Rs38,467 per ton. The cost of imported 11.8 kg LPG cylinder is Rs547 while the production cost of locally produced LPG cylinder is Rs452.

He attributed the on-going competition among marketing companies to the surplus stocks of LPG in the country coupled with low demand due to which the consumers are ultimately benefiting from this price war. “When case price war comes to an end prices will again go up,” he said.

Chairman LPG Association of Pakistan (LPGAP)(a group of over 40 marketing companies) Iqbal Z. Ahmed linked the price decline to over supply situation of gas in the domestic markets caused by thin demand. As a result, companies are reducing the price to benefit the consumers.He told Dawn from Lahore that the situation was not exciting from his point of view as the domestic market was now open for both imported and locally produced gas resulting in stiff competition. Prices move both ways on demand and supply situation, he said.

He said currently local production stood at 1,600 tons per day. However, the country’s demand still ranges between 2,000-2,500 tons per day and there is abundant imported LPG in the market, therefore, the LPG demand currently touches the lowest level.

Mr. Iqbal anticipated a decline in LPG prices in March as the Aramco Contract Price has declined by $22 per ton in February.

Chairman of the Lahore-based LPG Distributors Association of Pakistan Mohammad Irfan Khokar said that marketing companies had yet to reduce the rates in Punjab, the NWFP and Azad Kashmir. However, LPG rates have declined in Sindh. He urged the government to formulate a policy aimed at maintaining uniformity in gas rates all over the country. He said 11.8 kg cylinder of various marketing companies is priced at Rs580-585 in Punjab and NWFP as against Rs475-480 in Sindh by the same companies. However, Shell Gas has kept its rate at Rs639 in Punjab and the NWFP while its rate in Sindh is Rs550.