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Ministry of Petroleum encouraging imports & discouraging local production

Ministry of Petroleum encouraging imports & discouraging local production

LAHORE: LPG Association of Pakistan (LPGAP) has expressed grave concern over unending imports of inferior quality LPG from Karachi Port and Taftan Border and urged the Federal Minister for Petroleum & Natural Resources Shahid Khaqan Abbasi to take cognizance of the situation and take immediate measures to save local LPG industry.

While addressing an urgent meeting of the stakeholders, Chairman LPGAP Farooq Iftikhar said that import of inferior quality LPG on vast scale is causing substantial loss, not only to the national exchequer as most of these imports are used as conduit to siphon money out of Pakistan but also to the national producers of LPG and all those LPG Marketing Companies who have paid substantial premium in the form of Signature Bonus to them to secure LPG allocation.

Farooq Iftikhar said that auto sector, which was previously using LPG has shifted back to CNG due to its being substantially cheaper than all other fuels. Industry too is presently availing both LNG and Natural Gas as both are available to them in adequate quantity. Further due to global warming and change in climatic conditions coupled with satisfactory supply of Natural Gas and LNG to major cities, the demand of LPG has considerable reduced.

Chairman LPGAP said that contract price of LPG which has been hovering around US Dollars 400 for the last many months, has largely been instrumental in availability of inferior quality imported LPG in huge quantity. The LPG Traders supply inferior quality LPG to Pakistan under a planned collusion with Pakistani importers by constantly keeping their price at a level that it remains appreciably below the local producer’s prices so as to continuously hurt and damage the local LPG industry. He said that today this low quality LPG mostly of Iranian origin is supplied ex Karachi at around Rs.50,000 per MT and the product is being sold throughout the country by non quota holder LPG Marketing Companies at around 680-690 per 11.8 kg cylinders. He said that the discount presently being offered by the LPG Exporters to Pakistani importers on declared CP prices is between 60-100 US dollars and is floating in nature, which adjusts automatically, so as to keep end price always below local LPG producers.

Farooq Iftikhar further stated that one of the two LPG import Terminals at Port Qasim also gives preferential and highly discounted rates to a couple of importers, because of the large volume of LPG they import.  Despite continuous hue & cry of local LPG Marketing Companies to draw the attention towards this gross anomaly of the concerned officials of the Ministry of Petroleum & Natural Resources and the Producer Companies, till date there has been no effect on them, as they fail to act. They also fail to understand the under lying motive of LPG Traders from Gulf States and local LPG importers of permanently damaging and closing the local LPG Industry and keeping the country dependent on imports only.

While elaborating the point, he said that last year in June, 2016, Saudi contract price was US$ 351 as against US$388 in June 2017. OGDCL price per metric ton was Rs.35000 last year wherein maximum Signature Bonus paid to them was around 40 million. However, in June 2017, there price is Rs.41500 with Signature Bonus amount having gone up t