ISLAMABAD – Pakistani consumers facing soaring Liquefied Petroleum Gas (LPG) prices could see some relief as the government announced plans to open LPG imports to competition and abolish the existing quota system.
The government decided to allow competitive LPG imports to encourage suppliers to source fuel from international markets at the lowest possible prices and improve availability across the country. The move comes as LPG consumers in several cities report paying between Rs700 and Rs800 per kilogram, while complaints about shortages and irregular supplies continue to emerge.
Malik acknowledged the growing concerns, saying the government had received complaints from different parts of the country about both excessive prices and the unavailability of LPG. Providing details about the country’s LPG requirements, the petroleum minister said Pakistan’s total monthly demand stands at approximately 2.4 million tonnes, equivalent to daily consumption of around 6,500 to 7,000 tonnes.
However, domestic production currently shares only around 2,000 to 2,500 tonnes, leaving the country heavily dependent on external supplies to meet its requirements. Malik explained that nearly half of Pakistan’s total LPG demand is fulfilled through supplies arriving from the western border. However, difficulties along this supply route have affected the availability of fuel.
The remaining requirements are met through imports transported by sea. With winter approaching and household demand expected to increase, the government is now looking towards alternative import arrangements to prevent a major supply disruption.
The government has abolished the existing LPG quota mechanism, which previously governed the allocation of supplies in the market. Under the new arrangement, local companies will be directed to divide their available LPG stocks into smaller lots of five or 10 tonnes and offer them through competitive auctions. The results of these auctions will also be published publicly to improve transparency and allow buyers to compete for available supplies.
The petroleum minister said the government wanted to introduce a competitive mechanism that would encourage cheaper imports and ensure that consumers receive fuel at more affordable prices.
To strengthen the country’s supply position, the government has also directed three major state-linked entities — Pakistan State Oil (PSO), Sui Southern Gas Company (SSGC) and Pakistan LPG Limited — to arrange bulk imports of LPG. The decision is aimed at increasing the volume of imported fuel and reducing the risk of shortages during periods of peak demand.
The government hopes that opening imports to competition, eliminating quotas and introducing transparent auctions will improve market supplies while putting pressure on excessive prices.
Apart from LPG arrangements, the government is also preparing for the expected increase in household gas consumption during December and January. Ali Pervaiz Malik said the government was making every possible effort to ensure piped gas availability for domestic consumers during all three daily meal times.
He acknowledged that meeting winter demand could require the procurement of more expensive fuel, including LNG (liquefied natural gas), to maintain supplies through the existing gas network. The government has assured that it is prepared to explore additional fuel imports rather than allow households to face severe shortages during the winter season.
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