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Rescue Plan for local LPG producers demanded

Rescue Plan for local LPG producers demanded

LAHORE: Inconsistent policies regarding pricing of local LPG and undue advantage to importers is turning the country into paradise for traders & importers.

At an urgent meeting, Chairman LPG Association of Pakistan (LPGAP) Farooq Iftikhar said that despite the fact that the country is facing huge trade deficit, no efforts to control are visible, as a matter of fact, importers are being encouraged.

Farooq Iftikhar said that import of low quality LPG, injurious to health is obviously selling at cheaper rates and LPG Marketing Companies selling good quality local LPG are incurring heavy losses as presently there is a difference of Rs. 10,000 per MT between indigenous LPG and low quality imported LPG.

Chairman LPGAP said that  Marketing Companies selling locally produced LPG are not even recovering their basic cost and it is getting difficult for them to continue their business in face of non-supportive attitude of the Government and local producers.

He said that at present over 155 LPG marketing companies are operating in Pakistan. Around 40-50 having local allocation are bound to lift their allocation even if they have to sell below landed cost and bear huge loss.  He said that local LPG industry of Pakistan which is instrumental in selling environment friendly fuel is also solely responsible in bringing down massive trade deficit, a big economic challenge presently for the Government, but MP&NR policy on LPG is supporting importers only.

Farooq Iftikhar said that low priced inferior quality LPG is flooding the Country by way of mis-declaration of  quantity smuggled through land routes by evading taxes. He said that un-restricted inflow of spurious / low quality LPG through Taftan, Chaman and Mand etc and also low spec LPG through SSGC & EVTL terminals is causing not only substantial loss to the national exchequer (as most of these importers are using illegal Hundi system to siphon money out of Pakistan) but also to the indigenous 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 face closure because of continuous loss.

Chairman LPGAP said that both auto sector & Industry, which were previously using LPG is shifting back to CNG because of availability of both LNG and Natural Gas to them in adequate quantity & less price. Further due to global warming and change in climatic conditions coupled with increased availability of Natural and Liquefied Natural Gas (LNG)  the demand of LPG has considerable reduced.

He said that Traders turned importers are importing inferior quality LPG into Pakistan, is being done under a planned collusion with Mideast exporters 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. Unfortunately the MP&NR and local producers do not want to understand this motive and take corrective steps to combat this evil. Rather there keeping mum is helping kill the local LPG Marketing network.

Sooner or later only decanters cum importers and such Refineries having their own Marketing Companies will survive causing tremendous difficulties to the masses.