Wednesday September 28, 2022

Rs5.5/kg hike in LPG price on the cards

July 16, 2022

ISLAMABAD: The government is set to increase the LPG price by Rs5.5 per kg as the petroleum levy has been raised by 116.56pc per tonne to Rs10,111 per tonne on the locally-produced product.

“The existing LPG price notified by OGRA stands at Rs220 per kg, which will go up to Rs225.5 per kg after the imposition of petroleum levy of Rs10,111 per ton,” a senior official of the Energy Ministry told The News.

“This increase in the LPG price will come into effect once the notification of of increase in the petroleum levy is issued. The Petroleum Division will soon seek permission from the ECC for the notification of the new price of LPG after further increase in the petroleum levy by Rs5,442 per tonne. After ECC’s approval, the federal cabinet would ratify the ECC decision. This will enable the Petroleum Division to issue the notification,” he added.

The coalition government had increased the petroleum levy on LPG in the budget 2022-23 to Rs10,111 per tonne from Rs4,669 per tonne with an aim to collect Rs8 billion revenue per annum. The per month local production of LPG stands at 730,000 tonnes. The existing petroleum levy on LPG in terms of one kilogram is Rs4.69, which will jack up to Rs10.19 per kg after further hike in the petroleum levy of Rs5.50 per kg.

Irfan Khokhar, Chairman of the LPG Industries Association of Pakistan, called the increase in the petroleum levy an unjustified step, saying the existing petroleum levy stood at Rs4,669 per tonne. He asked the government to reduce the base price of LPG as its production cost was zero because it was a by-product of crude oil.

He referred to the era of ex-prime minister Mir Zafarullah Jamali when he had brought down the base price of LPG from 22,500 per tonne to Rs17,000 per tonne and froze the price at Rs17,000 per tonne for two years. “This government can also use this option and then it should impose a petroleum levy on the product,” he maintained and asked the government to lift the ban on use of LPG in automobiles.