Jamshoro Joint Venture Limited urges govt to revise LPG pricing formula for imported supplies

Jamshoro Joint Venture Limited (JJVL) has urged the federal government to review the existing liquefied petroleum gas (LPG) pricing mechanism, arguing that imported LPG is being sold under a price cap that does not reflect its actual cost.

In a letter sent to Minister for Petroleum Ali Pervaiz Malik, JJVL Chairperson Iqbal Z Ahmed called for separate pricing arrangements for locally produced and imported LPG, warning that the current framework discourages legal imports and could affect market supplies.

The request follows the Oil and Gas Regulatory Authority's (Ogra) LPG pricing notification for June 2026, which sets a maximum consumer price of Rs308,763.89 per metric tonne, equivalent to Rs308.76 per kilogramme or Rs3,643.41 for an 11.8-kilogramme domestic cylinder.

JJVL said the regulated ceiling price does not account for costs associated with imports, including freight, insurance, customs clearance, terminal handling charges, Port Qasim royalties, import-related taxes and letter-of-credit expenses.

According to the company, incorporating these costs raises the actual price of imported LPG to about Rs4,352 per 11.8-kilogramme cylinder, around Rs709 higher than the maximum price permitted under Ogra's notification.

The company said imported LPG operates under a different cost structure than locally produced LPG, as importers are exposed to international prices, shipping costs, exchange rate movements and port charges.

JJVL warned that requiring importers to sell at the same ceiling price as local producers undermines the viability of imports and could discourage suppliers at a time when Pakistan periodically relies on imported LPG to bridge domestic shortages.

As a solution, the company proposed that Ogra introduce separate pricing mechanisms for imported and indigenous LPG. It also called for broader deregulation of the LPG supply chain to encourage competition and support increased domestic production.

Ogra's June notification was issued under the LPG Policy 2016 and related provisions of the Ogra Ordinance and LPG Rules. The regulator has stated that the notified price is a maximum ceiling and that producers, marketing companies and distributors may sell LPG below that level.

The Petroleum Division has not yet publicly responded to JJVL's proposal.