Liquefied petroleum gas is being sold in the open market at prices far above the officially notified rate, even as a new November price notification takes effect. The gap between the official price and what many consumers actually pay has again become the central issue in Pakistan’s LPG market, raising questions about supply, enforcement and the cost of cooking fuel for households that depend on cylinders.
The Oil and Gas Regulatory Authority, known as Ogra, has notified a price of Rs294,075 per tonne for November, up from Rs279,341 per tonne. At the retail level, the official price of an 11.8 kilogram cylinder is Rs3,470, an increase of Rs173 from the previous level. The official rate works out at Rs294 per kilogram. Those figures set the benchmark against which market prices are measured, but reports indicate that the benchmark is not what many buyers encounter at the point of sale.
In the open market, LPG is reported to be selling at up to Rs630 per kilogram, more than twice the official rate. Company franchises are reported to be charging up to Rs400 per kilogram, also well above the notified level. The difference matters because LPG is not a marginal fuel for many families. It is the main cooking and heating fuel in homes without piped gas, and a sharp rise in its price feeds directly into household budgets, particularly for low and middle income families who have limited room to absorb higher energy costs.
The shortage behind the price pressure has been linked by the LPG Distributors Association to the wider regional situation. Its chairman, Irfan Khokhar, linked the shortage to the US-Iran war and the closure of the border with Iran. That explanation points to supply disruption rather than only local distribution issues, and it underlines how quickly regional developments can affect domestic fuel availability. When supply tightens, prices in an open market tend to rise first, and enforcement of a notified price becomes harder if the fuel itself is scarce.
The November notification therefore arrives at a difficult moment. On paper, the official cylinder price has risen by Rs173, reflecting the higher notified tonne price. In practice, however, the market price reported in some places is already far higher than the new official figure. For consumers, that means the notification itself does not settle the question of what they will pay. What matters is whether supply improves and whether the official rate is actually available where they buy their cylinders.
Industry voices are also raising a separate policy concern. LPG marketing companies have threatened a shutdown or strike from 16 November if the private sector is sidelined in the upcoming LPG policy. That warning came from Ali Haider, chairman of the Pakistan LPG Marketers Association. The threat adds a further layer of uncertainty for consumers, because any disruption to marketing and distribution could worsen availability at a time when prices are already high and supply is reported to be tight.
The debate over the upcoming policy is therefore closely tied to the price issue. The private sector’s role in import, marketing and distribution is a key question in how the market is organised, and the companies now warning of action argue that they should not be excluded from the new arrangements. How that question is resolved could affect competition, supply planning and the ability of the market to respond when imports are disrupted.
This development follows a separate story reported the previous day about a body reviewing LPG policy reforms. That earlier report concerned the review process itself. The present story is different: it is about the new November price notification and the market prices now being reported alongside it. The two stories are linked by the same underlying problem, the gap between notified and market prices, but they describe different steps in the unfolding debate.
The coming weeks will show whether supply improves, whether the threatened action by marketing companies materialises, and whether the upcoming policy addresses the concerns now being raised. Until then, the November notification stands as the official benchmark, while open market prices reported at up to Rs630 per kilogram show how far the lived experience of many buyers remains from that benchmark.
Source: Dawn.
