ISLAMABAD: In an attempt to overcome crippling gas shortages, the incumbent Pakistan Tehreek e Insaaf (PTI) government has decided to formulate a long term Liquefied Petroleum Gas (LPG) policy to promote its use.
The production of indigenous gas-commonly known as sui-gas is static for over a decade now. The ever-increasing population and consumption, has been resulting in a gas shortfall for all the sectors where it is used. Over the years this shortfall is becoming a chronic problem, especially in the winter season.
‘We cannot extend the existing pipeline network and are going to make policy by promoting the use of the LPG in all sectors in new long term LPG Policy”, special assistant to Prime Minister on Petroleum Division Nadeem Babar said while chairing a meeting of stakeholders here on Thursday.
Local LPG producers, marketing companies, importers and distributors also attended the meeting. Indigenously produced natural gas is traditionally supplied to the consumers through an extensive pipeline network.
The gas utilities-SNGPL and SSGC have been facing losses worth billions of rupees due in their pipeline network due to leakages in the system including theft and mismanagement. The use of LPG would also help control these system leakages, some officials believe.
PM’s special assistant told the participants of the huddle that the government would form long term policy to promote the use of LPG in the domestic sector.
The existing tax regime on LPG would continue, however, no new tax would be imposed on the sector in order to encourage its import to meet domestic demand, he added.
He ruled out restoring regulatory duty on LPG import to encourage its import to meet the growing demand of gas in the domestic sector.
The local producers of LPG have been pressing the government to restore the regulatory duty on import of LPG. If their demand is accepted, it would discourage the import of LPG. It would also result in creating a shortage of LPG that would cause its price hike, importers believe.
After the government abolished regulatory duty on LPG imports, import has increased. This has resulted into reduction in its prices making it affordable product the poor, they claim.
The founder Chairman LPG Industry Association Pakistan Irfan Khokhar told the participants that LPG is 65 percent cheaper fuel for the auto sector compared to petroleum products. It is even 20 percent cheaper than CNG, he claimed. Its use in the auto sector would reduce the country import bill, he maintained.
Petroleum product is the major portion of the country’s import bill which ultimately leads to severe current account deficit.
The meeting was informed that during the last 10 months, LPG was available on lesser than OGRA’s notified prices. LPG distributors and marketing companies demanded to remove the signature bonus being charged by local LPG producers.
They said that it would reduce the price of LPG to provide relief to the consumers. Advisor to prime minister agreed to remove it in new LPG policy, sources privy to the meeting said.
