KARACHI, Aug 17: Welcoming the ECC decision of reducing duties on import of LPG equipment, LPG sector stakeholders believe that there is a dire need to make LPG cheaper than other fuels to promote its use in the auto sector.
A spokesperson for the LPG Association of Pakistan, Belal Jabbar, told Dawn on Friday that the government needs to make LPG cheaper than petrol if it wants to encourage use of gas in the auto sector.
He said in the last three years, only four LPG auto gas stations became operational which should have been 10 to 15 gas stations right now.
He said the response of LPG vehicle owners was slow due to unattractive prices of LPG. These stations are purely selling locally produced LPG.
The LPGAP in a recent meeting with the Ministry of Petroleum suggested that the government should use funds collected under gas cess to subsidise import of LPG for automotive use.
LPG's popularity as an auto fuel has been growing, but it can best be characterised as erratic since at times it is more expensive than petrol.
"There exists a considerable potential to increase local production of LPG from existing gas and oil-fields. If the government is serious about promoting use of LPG as an alternative to petrol and diesel, this potential must be utilised," Belal said.
He said that reduction of duties to 10 per cent on LPG equipment would encourage investment in development of the auto gas sector.
With the exception of the LPG pump and control panel, all other accessories and equipment are locally available, he said.
He said that the country imported only 55,000-60,000 tons of LPG in 2011-2011 while local production stood at 410,000 tons in which share of LPG consumption in auto sector (rickshaws, taxis, Suzuki vans, other vehicles etc) stands at 50 per cent followed by 30 per cent in domestic use and 20 per cent in commercial sector.
In view of 85 per cent local production, he claimed that the LPG is definitely 20 per cent cheaper than petrol in auto sector. In case if LPG is totally imported at higher price, its saving would only be two per cent in auto sector than petrol.
All-Pakistan LPG Distributors Association Chairman Abdul Hadi Khan was of the view that the government should consider giving subsidy on its import to keep its price competitive as compared to other fuels.
He said the government still wanted to impose some kind of levy on LPG which would make gas more costly.
He added that the government should consider removing GST on import of LPG so that consumers could get cheaper gas.
