LAHORE: Following the surge in local LPG production and the government’s consistent effort to reduce LPG producer prices, retail rates have fallen to as low as Rs90 per kg in most major cities of the country making LPG cheaper than petrol, diesel, kerosene and furnace oil.
The country’s current LPG production stands at 1,600 tonnes per day up from a low of 1,200 tonnes per day at the beginning of 2013.
“Intense competition and an oversupply of product have contributed to the precipitous decline in retail rates to the benefit of the consumer. However this would not have been possible without the government’s concerted effort in keeping LPG producer prices in check, which account for 80 per cent of the component of the end price,” said Belal Jabbar, spokesman of LPG Association of Pakistan.
Abundant LPG availability coupled with low prices has made this fuel once again affordable for the consumers, especially those deprived of access to piped natural gas in remote and Northern Areas of the country. LPG’s price differential with natural gas has narrowed down significantly owing to the reduction in Producer Prices.
LPG Marketing Companies have been hammered with the onslaught of an excess supply and rumours that LPG prices would fall further. Producers have however applied their brakes on any further reduction and at the current level imports from Iran have also slowed down.
“Companies have reduced their prices no less than eight times in the last fortnight and have suffered debilitating inventory losses. The upside to this has been the rapid decline in LPG retail prices which is expected to spur demand from the domestic and auto sector” said Belal. Rates of domestic and commercial cylinder are down to Rs1,050 and Rs4,050 respectively —the lowest since 2011.
