Govt cuts LPG prices by 1.62pc

ISLAMABAD: The government has slashed liquefied petroleum gas prices by 1.62 per cent or Rs3.86 per kilogram for both domestic and commercial consumers for June 2024, following a decline in global costs, the Oil and Gas Regulatory Authority (Ogra) said on Friday.

Following this adjustment, the 11.8-kilogram domestic gas cylinder will now cost Rs2,768, while the commercial cylinder (45.4kg) will be priced at Rs10,650.

In comparison, last month’s domestic cylinder price was Rs2,814 and the commercial cylinder was Rs10,826. As per a notification from Ogra, the cost per kilogram of LPG after the decrease will be Rs234.6.

Notably, last month too, the government slashed LPG prices by 4.74 per cent or Rs11.88 per kilogram for May 2024. LPG, utilized for cooking purposes in areas without piped natural gas, has seen discrepancies between government-regulated prices and market rates.

The regulator said: “The LPG producer price is linked with Saudi Aramco-CP and the dollar exchange rate. As compared to the previous month, Saudi Aramco-CP has decreased by 2.0 per cent. The average dollar exchange rate has also gone down by 0.04 per cent, resulting in a decrease in LPG consumer price by Rs45.62/11.8 kg cylinder (1.62 per cent). The per-kg decrease in LPG consumer price is Rs3.86.”

The regulator determined the producer price of LPG -- assuming a composition of 40 per cent propane and 60 per cent butane -- to be Rs159,140 per tonne. This price includes the 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 Rs1,878/11.8kg cylinder.

Before the imposition of an 18 per cent general sales tax (GST), the producer price would have been Rs163,810 per tonne, resulting in a price of Rs1,933/11.8kg cylinder. The GST on Rs159,140 per tonne would have been Rs29,486 per tonne or Rs348 per 11.8 kg cylinder.

Ogra has further calculated a maximum producer price of Rs193,295 per tonne or Rs2,281 per 11.8kg cylinder. 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 per cent GST of Rs6,300 per tonne or Rs74.34 per 11.8kg cylinder, on the marketing and distribution margin of Rs35,000 per tonne.