Petroleum Division asks Ogra to rationalise LPG prices

ISLAMABAD: The Petroleum Division has woken up to what it termed the "exorbitant prices of LPG" (liquefied petroleum gas) and asked the Oil and Gas Regulatory Authority (Ogra) to carry out an audit to establish reasonable producer prices and profit margins.

Taking cognisance of the media coverage of the exorbitant LPG prices, the issue was discussed in the Ministry (of Petroleum) and it was agreed that an audit to ascertain the LPG production cost of producers and LPG production and distribution margin, for setting a reasonable producer price and margins to address the LPG pricing issues, said a letter received by Syed Muhammad Ahsen, Deputy Director (LPG) at the Petroleum Division.

The Ogra officials said the exercise was long overdue, as was the audit of various commercial practices, including the unchecked over-charging by the producers in the name of premiums and so-called "signature bonuses" on one-time supplies of surplus production, which defeated the objective of the official LPG Policy.

The public sector producers of LPG have collected billions of rupees in signature bonuses, despite orders prohibiting such receipts. They have also continued to supply LPG produced at Nashpa Field in Karak district of Khyber Pakhtunkhwa, contrary to the orders of Ogra and dictates of the Article 158 of the Constitution.

The News has repeatedly highlighted the plight of the LPG users and how they were exploited by the public sector producers who charged over Rs20 billion rupees in apparent violation of the LPG Rules. There is growing concern over the impact of exorbitant LPG prices, which have almost doubled in a year, on the health of low-income households.