LAHORE: LPG Association of Pakistan (LPGAP) urgently draws attention of the Ministry of Petroleum and Natural Resources to take immediate notice of the plight of LPG Marketing & Storage companies that may close before Ramadan because of over imports of cheap LPG and high price of local LPG producers.
At an urgent meeting, Chairman of the LPG Association of Pakistan Farooq Iftikhar said that Ministry of Petroleum and Natural Resources must act now otherwise investment of billions and employment of around 500000 would be effected adversely.
As over imports of low quality LPG continue to flow in Pakistan, and majority of dealers busy in hoarding imported cheap LPG for Ramazan & Eid, LPG Marketing Companies are facing tremendous difficulties in selling local good quality LPG because of high price being maintained by LPG producers for reasons only they know, despite being in violation of LPG Policy 2017.
“Presently importers selling LPG to dealers, decanters besides LPG companies having no local allocation is between Rs.55000/- to Rs57000 pet MT inclusive of all taxes, whereas locally produced LPG costs LPG Marketing Companies having allocation around Rs60,000 to Rs62,000 per MT, giving importers a very clear edge. Further LPG Marketing Companies have a sizeable establishment viz-a-viz importer, selling in bulk having negligible overheads”, Farooq Iftikhar added.
He said that FBR’s selective policy of only allowing specific importers withholding tax exemption gives additional advantage to them over local product. To add to these woes, LPG terminals giving unrealistic terms to preferred importers, thus creating hurdles for others.
Chairman LPGAP said that local producer bench marking prices of local LPG product on higher side using contract clauses to their singular advantage, as marketing companies forced to lift LPG monthly quota having paid hefty signature bonus in advance for 5 years or risking their forfeiture. High Signature Bonus offered to state producers also manipulated by Importers, public Sectors organization to give them advantage besides forcing to close medium sized LPG Marketing companies serving poor masses across the country.
He said that OGRA’s failure to control prices & non compliance by producers shows the helplessness and apathy of the regulator. Long term goal of importers successful as ministry fails to install check including applying anti dumping duty to support local industry nor restricting imports by quantitative restriction, as spelt out in LPG 2017 policy but indirectly helping importers by maintaining complete silence.
He said that importers also regularly import cheap LPG of high sulphur content through and route as well. Weight and quality mis-declaration of LPG coming through Taftan & Mand being sold in large quantity by mixing it with local/imported LPG.
In order to avert a complete collapse of the LPG Industry, Ministry of Petroleum and Natural Resources is requested to take immediate action by directing LPG Producers to lower their prices to Saudi Aramco CP after taking into account Signature Bonus taken by them in advance to and to help the Industry to survive.