OGRA issues 150 licences to set up LPG refuelling stations

KARACHI: Oil and Gas Regulatory Authority (OGRA) has granted licenses for construction of over 150 liquid petroleum gas (LPG) auto refueling stations in line with government’s policy to share the burden on conventional auto fuels, an official said on Thursday.

However, the compressed natural gas (CNG) station owners are not interested in venturing in this business. “LPG refuelling is an entirely different business and requires a different infrastructure, therefore we are not willing to switch to LPG despite the supply constraints with CNG,” Ghayas Paracha central chairman, All Pakistan CNG Association (APCNGA) said.

As of June 30, 2017, there were 13 LPG producers, and 129 LPG marketing companies operating in the country, having more than 4,000 authorised distributors.

“Further, there are 10 operational LPG auto refuelling stations within the country and more than 150 LPG auto refuelling stations have been granted licenses for construction,” the official said, adding that the licenses were awarded after fulfilment of all codal formalities, requirements and verification of the construction site by the third party inspectors in accordance with rules and regulatory framework. “LPG is suitable for domestic use and it is not safe for vehicles in Pakistan because of absence of proper rules and their implementation,” Paracha added.

An official at the Ministry of Energy said the government was promoting LPG fuelling stations in a bid to gradually phase out compressed natural gas (CNG) stations. Currently, LPG accounts for about 0.7 percent of the total primary energy supply in the country. The current size of LPG market is around 1.21 million tons per annum. It is primarily meant to fulfil the domestic fuel requirement, especially in natural gas starved areas and in peak shaving times in the urban territories.

Refineries, gas producing fields and imports are three sources of LPG supply in the country. Around 58 percent of the LPG consumed is met with local production in Pakistan, whereas the rest is imported.

An analyst said the use of LPG in automobiles could be possible only if the country had long-term supply contracts with other countries, in case no such contracts were in place, LPG would not be available for the domestic sector after its consumption in vehicles.

LPG is gradually becoming a popular domestic fuel among people who live in far-flung areas and where the natural gas infrastructure does not exist. In the current energy scenario, LPG is the most viable alternative in the winters to cater for the demand supply gap of natural gas network.

“OGRA anticipates a significant growth of LPG auto-refuelling stations in near future. The LPG companies entitled by their memorandum and article of association are applying for a number of LPG storage and filling plants, LPG refuelling stations and LPG storage facilities at the port in light of LPG Policy and Regulatory Framework,” the official added.

From 2008 onwards, OGRA started registration of LPG equipment manufacturing companies to eradicate substandard manufacturing, sale and use of LPG equipments. So far, OGRA has pre-qualified 44 LPG equipment manufacturing companies as authorised manufacturers.