OGRA to notify fresh LPG prices

ISLAMABAD: The Oil and Gas Regulatory Authority (Ogra) Friday admitted that it had notified reasonable price in line with existing LPG policy without making fair analysis that had sparked controversy in the industry and tussle with Ministry of Petroleum and Natural Resources.

The regulator said that it had communicated LPG price at Rs900 per 11.8 kg for domestic cylinders proposed by the Ministry of Petroleum and Natural Resources. But it failed to respond to the questions raised by the journalists why it had delayed the fresh advice of petroleum ministry to notify LPG price at Rs1100 per 11.8 kg domestic cylinders.

“We are examining the fresh LPG price proposed by the petroleum ministry and have sought comments and records from stakeholders before notifying it, Member Finance Noorul-Haque and Executive Director (ED) Finance Misbah said in a joint press conference. Both said that LPG market was still deregulated as rules were not amended but stressed that they set price in line with existing policy which allowed to determine reasonable price.

Responding to question, both officials of regulator admitted that analysis was not made to judge whether Rs900 price was reasonable or not.

The price of LPG communicated by Ogra was proposed by petroleum ministry in a meeting of Council of Common Interests (CCI) one year back. But industry officials say that this price was proposed one year back which regulator communicated but it ignored the fresh advice of petroleum ministry to set LPG prices at Rs1100 per 11.8 kg domestic cylinders. 

Meanwhile, Irfan Khokhar, Chairman LPG Distributor Association Pakistan criticised the role of Ogra and warned that prices set by Ogra had led to cancelling orders of LPG imports that would cause another crisis of shortage in LPG supply in the country. He said that regulator had ignored that importers while setting the price and demanded that prime minister should dismantle the authority. He said that there would be no imports in coming months which would lead to another crisis.

He said that local LPG producers had also refused to accept the price notified by Ogra. He said that LPG imports stood at 62117 metric tons in 2014 that jumped up to 1164706 metric tons in 2016 filling supply gap which resulted in stabilising prices.

“Owing to enhanced imports, the price of LPG has come down from Rs200 to Rs100 per kg, he said adding that intervention of Ogra that led unfair price would lead to shortage of product and prices would jump up again to Rs200 per kg. He said that Ogra was reluctant to notify price of Rs1100 per 11.8kg domestic cylinders proposed by the petroleum ministry.