Friday June 21, 2024

LPG prices drop 4.74pc for May as global costs retreat

By Israr Khan
May 01, 2024
A worker can be seen loading the LPG cylinder. — AFP/File
A worker can be seen loading the LPG cylinder. — AFP/File

ISLAMABAD: The government has slashed liquefied petroleum gas prices by 4.74 percent or Rs11.88 per kilogram for both domestic and commercial consumers for May, tracking a decline in global costs, the Oil and Gas Regulatory Authority said on Tuesday.

Following this adjustment, the 11.8-kilogram domestic gas cylinder will now cost Rs2,814, while the commercial cylinder (45.4kg) will be priced at Rs10,826.

In comparison, last month's domestic cylinder price was Rs2,954, and the commercial cylinder was Rs11,365.According to a notification from the OGRA, the cost per kilogram of LPG after the decrease will be Rs238.46.

LPG, utilized for cooking purposes in areas without piped natural gas, has seen discrepancies between government-regulated prices and market rates.In a statement, the regulator said: “The LPG producer price is linked with Saudi Aramco-CP and dollar exchange rate. As compared to the previous month Saudi Aramco-CP has decreased by 5.6 percent.

The average dollar exchange rate has also gone down by 0.18 percent resulting to decrease in LPG consumer price by Rs140.18/11.8 kg cylinder (4.47 percent). The per Kg decrease in

LPG consumer price is Rs11.88.”

The regulator determined the producer price of LPG, assuming a composition of 40 percent propane and 60 percent butane, to be Rs162,418 per tonne. This price includes an excise duty of Rs85 per tonne, excluding the petroleum levy of Rs4,669 per tonne. Consequently, the total cost for an 11.8 kg cylinder amounts to Rs1,917/11.8kg cylinder.

Before the imposition of an 18 percent general sales tax (GST), the producer

price would have been Rs167,087 per tonne, resulting in a price of Rs1,972/11.8kg cylinder. The GST on Rs167,087 per tonne would have been Rs30,076 per tonne or Rs355 per 11.8 kg cylinder.

The OGRA has further calculated a maximum producer price of Rs197,162 per tonne or Rs2,326.5 per 11.8kg cylinder. The marketing, distribution, and transportation margins have been set at Rs35,000 per tonne, comprising a marketing margin of Rs17,000 per tonne, a distribution margin of Rs10,000 per tonne, and a transportation margin of Rs8,000 per tonne, resulting in a total margin of Rs413 per cylinder. Additionally, consumers are taxed with an 18 percent GST of Rs6,300 per tonne or Rs74.34 per 11.8kg cylinder, on the marketing and distribution margin of Rs35,000 per tonne.