ISLAMABAD, March 26: The government is likely to slash import duty on Liquefied Petroleum Gas (LPG) from 10 per cent to 5 per cent in the financial year 2002-03.

Informed sources told Dawn on Tuesday that the issue had already been discussed with the relevant stakeholders, however, it would be announced in the forth coming budget.

Sources said that the Ministry of Petroleum and Natural Resources had asked the government to allow the LPG gas at zero rate of import duty.

According to sources, it was not possible for the government to allow it duty free, however, it was expected that the government might slash the duty to 5 per cent, which would come into effect from the next financial year.

The government had levied 10 per cent import duty on LPG in the budget of 2001-02.

Sources said the reduction in LPG import duty was aimed at providing competitive environment and maintaining local prices at reasonable level. Last year, the government allowed Pak-Arab Refinery (Parco) to export around 60,000 tons of LPG due to surplus production.

The local LPG prices had increased by around 50 per cent early this year as all the LPG producers quoted low production due to reduced capacity utilization by the refineries in the back ground of low petroleum consumption and surplus motor spirit production.