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LPG becomes most expensive fuel in country

February 04, 2012

LPG prices have been notified to increase. - File photo

ISLAMABAD: As the price of Liquefied Petroleum Gas (LPG) is increased by Rs15 per kilogram to reach a new high ever, the industry players have blamed the government for imposing more than Rs11 per kg as petroleum levy on LPG.

The new highest-ever price of Rs109,702 per ton for the locally produced LPG has been notified by the producers including the oil refineries, whereas the LPG distributors have announced to observe strike on February 15 against the increase.

The notification issued by the state-owned LPG producers said the new LPG rates for February will be Rs83,000 per ton and the petroleum levy of Rs11,486 per ton will be added to this amount, whereas the other additions are excise duty of Rs85 per ton and 16 per cent GST.

"The price increase is from Rs93,856 in January to Rs109, 702 per ton for February", said Bilal Jabbar, spokesman for the LPG Association of Pakistan. "Government is the single largest producer of the LPG in the country and is therefore the direct beneficiary of the increase in prices", he said.

The LPG prices have also been impacted due to the imposition of petroleum levy as a result of which local prices have far exceeded its international price.

"Pakistan is the only country in the world where a tax has been imposed on local production to facilitate imports", Jabbar said, adding "The whole exercise has been done to encourage favorites to manipulate imports".

He said the government policies were causing serious financial loss to the consumers and the LPG industry will also bear serious implications.

On the other hand, the main body of LPG distributors have criticised the government policies which have resulted in LPG prices reaching a new high.

"The local LPG producers have shifted the burden of petroleum levy to 60 million consumers, giving an increase of Rs15,850 per ton to reach a record level of Rs109,700 per ton", Chairman of FPCCI Standing Committee on LPG Abdul Hadi Khan said. "It was announced by the government that petroleum levy of Rs11,400 per ton was meant for producers and not consumers but now they have transferred it to the consumers".

He said this has enhanced the price of the 11.8 kg domestic cylinder by Rs188 and the price of the 45.4 kg commercial cylinder has been jacked up by Rs726.

Whereas, chairman of his own faction of the LPG association, Irfan Khokhar has announced a strike on February 15 against passing of the petroleum levy to the consumers which has resulted record high of LPG in country.

"The cost of local LPG is between Rs13,000 and Rs14,000 per ton while it is being sold at Rs109,700 per ton",  Khokhar said adding that there has been a Rs350 billion scam in the LPG affairs during past five years. He urged the government to devise a price control mechanism to bring down the LPG price in the country. -Kalbe Ali