Unprecedented rise in LPG prices: Govt to make JJVL LPG plant operational

ISLAMABAD: Amid an unprecedented rise in the price of LPG cylinder of 11.8 kg that currently stands at Rs2,436 as per Ogra’s latest notification, which may further rise during the forthcoming winter season on account of increasing demand and supply gap, the Petroleum Division has geared up its endeavours to revive the Jamshoro Joint Venture Limited LPG and NGL extraction plant. This will not only scale down the LPG prices but also reduce reliance on imports.

The 11.8 kg cylinder is being sold in the market for Rs2,500 -- the price which was never observed before. Sources said when the winter season starts and reaches its peak in late December and January, LPG prices are likely to soar to Rs3,000 per cylinder. The government wants to revive the JJVL LPG plant which, if becomes operational, will bring down the price of LPG cylinder by Rs500, providing relief to people.

Secretary petroleum, when contacted, confirmed the development, saying the government has stepped up efforts to revive the JJVL plant in the supreme interests of the country. Official sources at the Petroleum Division also revealed that DG LG (Liquid Gases) wrote a letter on October 1, 2021 to managing director of SSGC, asking him to resume the gas supply to JJPL LPG/NGL extraction plant in the light of ECC decision taken on August 12, 2020, so that the LPG plant could play its role in producing 15 percent of the country’s LPG production.

And to this effect, considering the deficit in the demand and supply of natural gas in the country, SSGC has been directed to immediately enter into negotiations with JJVL on agreeable terms of the old and new contracts and make decisions on the resumption of gas supply in the best national interest.

The copy of the letter available with The News says that the SSGC may resume gas supply to JJVL LPG extraction plant to make it operational in the light of ECC decision dated on August 12, 2020 on day-to-day basis with clear understanding that it may stop any time, preferably until the final Supreme Court’s order. However, considerable time has passed but the decision is yet to be implemented by the Sui Southern.

The letter also highlights the concern of the government that the country has to rely on LPG imports exerting pressures on the consumers in terms of high LPG prices and depletion of foreign exchange reserves when the JJVL plant is very much available to contribute up to nearly 15 percent to the local production.

It is a known fact that the plant was producing over 200 metric tons of LPG per day under the agreement endorsed by the Supreme Court for the extraction of LPG and NGL at the JJVL plant. The LPG produced at the JJVL plant will not only help in import substitution but also contribute to the foreign exchange through the exports of NGL (Natural Gas Liquids).