OGRA hikes LPG price with the start of new year

ISLAMABAD: The Oil and Gas Regulatory Authority (OGRA) on Monday notified a substantial increase in the price of Liquefied Petroleum Gas (LPG) for the month of January 2024.

According to OGRA notification, the 11.8kg domestic cylinder price has increased by Rs18.52 with its new price now Rs3,025 and issued a notification of hike in the LPG price while the new price of the LPG, after the issuance of notification, have come into effect across the country.

It is relevant to note that the increase in the LPG price will affect the LPG consumers who are already reeling under economic hardships. Moreover, the recent increase in LPG price comes as a serious blow to the consumers’ monthly budget who were accustomed to the previous rate of approximately Rs254.86 per kg.

The Rs1.57 per kg hike translates into a notable uptick in expenses for households relying on LPG for their cooking and heating needs. The new rates are poised to challenge household budgets already grappling with inflationary pressures.

For those utilizing the standard 11.8 kg LPG cylinder, the revised cost now stands at Rs3,025.87. This marks an increase of Rs18.52 per cylinder from the previous price of Rs3,007.35, further intensifying the economic burden on consumers.

The hike in cylinder prices is expected to impact a wide spectrum of consumers, including both urban and rural households.

The LPG price hike has triggered reactions from various quarters, with consumers expressing concern over the growing cost of essential commodities.

 Industry experts point to factors such as international market dynamics, supply chain challenges, and fluctuating oil prices as potential contributors to the increase.

In a short statement, OGRA said that the LPG producer price is linked with Saudi Aramco-CP and US$ dollar exchange rate. As compared to previous month Saudi Aramco-CP has increased by 1.6 percent.

The average Dollar exchange rate has however gone down by 0.86 percent resulting in an increase in LPG consumer price by Rs. 18.52/11.8 kg cylinder (0.61 percent), it added.

Irfan Khokhar Chairman LPG Industries Association Pakistan said that as the winter progressed, the natural gas shortfall has intensified. He said that it has become difficult to cook food for the people living in the plain areas and hilly remote areas of the country as well. He said it is demanded from the government to amend the LPG policy 2016 as the price of LPG has gone beyond the purchasing power of the inflation-hit consumers. He said a better LPG policy should be made so that cheap, quality and abundant LPG can be provided to the poor people in this inflationary situation. He said the natural gas crisis has intensified across the country, even cooking two meals a day has become difficult in most areas of the country while LPG is the only cheap fuel that is capable of meeting the shortage of natural gas. At present, there is a daily production of 2000 metric tons of LPG across the country while the local consumption has crossed 5000 tons, said Irfan Khokhar. He added that 60% of domestic demand is dependent on imported LPG.

Irfan Khokhar also said that poor policies and high taxes have adversely affected the LPG industry. He said LPG distributors pay billions of rupees in taxes while if LPG is made tax-free like LNG and unnecessary taxes on LPG is abolished then they will be able to provide LPG to every house at a lower price. All LPG industry is requested to ensure purchase and sale of LPG at OGRA fixed price, Irfan Khokar requested to LPG producers, distributors, and dealers of the country.