Wednesday February 28, 2024

LPG prices go up by Rs45.18 per cylinder for December

December 01, 2023

ISLAMABAD: The caretaker government on Wednesday raised the prices of liquefied petroleum gas (LPG) by Rs3.83 per kilogram for commercial and domestic consumers for December, citing a rise in the average dollar exchange rate.

The Oil and Gas Regulatory Authority (OGRA) said in a notification that the LPG prices increased to Rs254.86 per kg from Rs251.03 in November, affecting various cylinder sizes differently.

A vendor is seen busy making traditional bread (Naan) in the LPG tandoor in Lahore on Jan 9, 2023. —APP
A vendor is seen busy making traditional bread (Naan) in the LPG tandoor in Lahore on Jan 9, 2023. —APP

A spokesperson OGRA said the LPG producer price is tied to the Saudi Aramco-CP and US dollar exchange rate, which remained unchanged compared to the previous month. However, the average dollar exchange rate increased by 1.87 percent, leading to a Rs45.18/11.8 kg cylinder (or 1.5 percent) rise in LPG consumer prices.

Post-hike, the price of a domestic cylinder will increase by Rs45.18/11.8kg, from Rs 2,962.17 in November to Rs 3,007.35. Simultaneously, the price of a 45.4kg commercial cylinder will increase by Rs173.882.

OGRA has determined the producer price of LPG, assuming a composition of 40 percent propane and 60 percent butane, to be Rs176,314.44 per tonne. This price includes an excise duty of Rs85 per ton, excluding the petroleum levy of Rs4,669 per tonne.

Consequently, the total cost for an 11.8 kg cylinder amounts to Rs2,080.51. Before the imposition of an 18 percent general sales tax (GST), the producer price would have been Rs180,983.47 per tonne, resulting in a price of Rs2,135.60/11.8kg cylinder. The GST on Rs180,983.47 per ton would have been Rs32,577.02 per tonne or Rs384.41 per 11.8 kg cylinder.

Furthermore, OGRA has calculated a maximum producer price of Rs213,560.49 per tonne or Rs2,520.01 per 11.8 kg cylinder. The marketing, distribution, and transportation margin have been set at Rs35,000 per tonne, comprising a marketing margin of Rs17,000 per ton, distribution margin of Rs10,000 per tonne, and transportation margin of Rs8,000 per ton, resulting in a total margin of Rs 413 per cylinder.

Consumers are also subject to an 18 percent GST of Rs6,300 per tonne or Rs74.34 per 11.8 kg cylinder on the marketing and distribution margin of Rs 35,000 per tonne.

It is noteworthy that in September, the caretaker government increased the LPG price by Rs 39 per kilogram (19.37 percent), and in October, the prices rose by 8.7 percent or Rs 20.86 per kilogram. However, in November, the prices decreased by Rs 9.95/kg.