LPG Hits Rs630 per Kg Against Official Rs294 Rate

LPG Prices Hit Rs630 per Kg in Open Market Amid Supply Shortages

Liquefied petroleum gas (LPG) prices have climbed to as high as Rs630 per kilogram in Pakistan's open market, more than double the official rate of Rs294 per kg set by the Oil and Gas Regulatory Authority (OGRA) for November.

The sharp increase comes amid supply disruptions linked to the US-Iran war and the closure of the Iranian border, which have intensified shortages in the domestic market.

While open-market LPG prices have reached Rs630 per kg, company-operated franchises are reportedly charging up to Rs400 per kg, also significantly higher than the government-notified rate.

In a notification issued on Saturday, OGRA raised the official LPG price for November to Rs294,075 per tonne from Rs279,341 per tonne in October. The revised rate increased the price of an 11.8-kg domestic cylinder by Rs173 to Rs3,470.

The regulator attributed the adjustment to changes in Saudi Aramco's contract price and the US dollar exchange rate.

According to OGRA, Saudi Aramco's contract price increased by 6.47% compared with the previous month, while the average dollar exchange rate declined slightly by 0.12%. These changes resulted in a Rs14.73 per kg increase in the consumer price.

However, the much higher prices in the open market are being attributed to worsening supply constraints, particularly after the closure of the Iranian border.

Iranian supply disruption raises concerns

LPG Distributors Association of Pakistan Chairman Irfan Khokhar described the situation as serious, stating that around 70% of Pakistan's LPG supplies were imported from Iran, while the remaining 30% came from domestic production.

He urged the government to take action against market manipulation and address the shortage of supplies.

LPG companies threaten shutdown over proposed policy

Meanwhile, LPG marketing companies have threatened to suspend operations from November 16 if the government introduces a new LPG policy without properly consulting the private sector.

Pakistan LPG Marketers Association Chairman Ali Haider warned that companies would go on strike from November 16 if the proposed policy was implemented.

He opposed any move to reverse deregulation in the LPG sector, arguing that the closure of the Iranian border had already created serious supply challenges.

Haider said that out of approximately 1.3 million tonnes of LPG, only around 225,000 tonnes were imported from the Gulf, with private companies handling most of those imports.

He also highlighted that the ProGas terminal at Port Qasim was under the control of Sui Southern Gas Company (SSGC), which, according to him, had not imported LPG for around seven months.

The association has written to Petroleum Minister Ali Pervaiz Malik, raising objections to the draft LPG policy submitted to the prime minister without consultation with private-sector stakeholders.

It has demanded complete deregulation of the LPG industry and opposed proposed measures that could restrict private-sector involvement in imports and distribution.

The association also expressed concern over the petroleum development levy of Rs4,669 per tonne imposed on locally produced LPG under the 2016 policy.