Our economic correspondent
ISLAMABAD: In a major development, the Pakistan Petroleum Limited (PPL) has been offered Rs378 million as signature bonus for a lot of five metric tons per day of LPG over a period of three years, reveal documents available with The News.
The signature bonus, or a premium offered by competing LPG marketing companies, is a payment in addition to the fixed price of LPG and has been challenged in the Lahore High Court as being prohibited by the LPG Production and Distribution Policy that was approved by the Council of Common Interests in 2016, the official said.
At the offered rate, the bonus amount comes to Rs800 per domestic cylinder, which is currently priced in the vicinity of Rs1,400 per cylinder. The premium offered is only 100 rupees short of the price of a LPG cylinder notified by Oil and Gas Regulatory Authority less than a year ago.
However, the offer made by Burshane was laughed off by the industry as it was the result of a more likely typographical error since signature bonuses offered in similar auctions have ranged between 50 and 70 million in the recent years. The Oil and Gas Development Company (OGDCL) accounts for the financial year ending 30th June 2017 show that the company received 2.5 billion rupees as signature bonus in the year to that date.
Signature bonus is known to be a major source of increase in the price of LPG cylinders as companies pay signature bonuses in the range of 6,000 to Rs12,000 on top of the maximum price that the LPG producers are allowed to charge.
