Pakistan orders action against possible LPG hoarding — Dawn

The Pakistani government has instructed federal and provincial authorities to coordinate actions following reports of possible hoarding of liquefied petroleum gas (LPG) ahead of winter. As Dawn reports, a letter from the Petroleum Division said that irregular dispatches of imported gas from terminals are raising concerns about the possible creation of an artificial shortage on the domestic market.

Prices exceed the set levels

Pakistan’s Oil and Gas Regulatory Authority (Ogra) was asked to ensure regular dispatches of imported LPG from terminals and its supply to consumption centers. The regulator was also instructed to take measures to prevent gas hoarding and ensure its availability to consumers at set prices, primarily in mountainous, remote and off-grid areas.

According to the publication, an 11.8-kilogram household LPG cylinder was selling on the market for about 5,000 Pakistani rupees — nearly 50% higher than the price of 3,296 rupees set by Ogra. A letter from the Petroleum Division to the Ogra chairman and the LPG director general stated that importers bring in fuel in line with domestic demand, but the volumes are not dispatched from terminals regularly.

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Plans to change distribution of local gas

The Petroleum Division said it had submitted measures to improve the supply situation. One of them provides for the sale of locally produced LPG through a transparent competitive mechanism in accordance with the 2016 LPG Policy. In the division’s view, this should strengthen competition, make gas distribution more transparent and reduce the concentration of the resource among a limited number of market participants.

At the same time, this process is being slowed by court cases. The Petroleum Division said the case is being considered by the courts, while the government reserves the right to use all legal mechanisms provided for by law.