THE measures announced by the Government on Tuesday convey a vivid impression that it was mindful of the plight of the consumers in the face of a record hike in the price of Liquefied Petroleum Gas (LPG). Addressing a news conference along with Minister for Information and Broadcasting Attaullah Tarar, Minister for Petroleum Ali Pervaiz Malik announced to open the LPG market to competition, introduce transparent auctions and increase imports through state-run companies to curb profiteering and prevent winter shortages. He held out an assurance that the Government would make every effort to maintain adequate gas supplies during December and January, when demand peaks, including importing expensive LNG, if necessary, to meet household requirements.
The proposed measures, if implemented in a sincere and transparent manner, might bring relief for people of Pakistan, who are being fleeced by the import and distribution mafias taking advantage of the closure of the border with Iran and disruptions in smooth import of gas from other countries due to the security concerns. Some upward adjustment in the price of LPG was understandable due to the prevailing situation and a significant increase in consumption during winter months but the wholesale hike in the price is reflective of poor governance and management. It is regrettable that a large number of citizens with absolute dependence on LPG for their kitchens have been left at the mercy of profiteers who are selling the gas as high as Rs. 700 per kilogram. A sharp and sudden increase means much for fixed income groups as they find it difficult to manage their household budgets. Pakistan consumes around 2.4 million tonnes of LPG annually, with more than half met through imports. The Minister acknowledged that closure of Iranian border crossings had created shortages, allowing some market players to sell LPG at Rs700-800 per kilogram, well above the international-market-based price of around Rs450. But mere acknowledgement of the crisis is not enough and the Government, besides the measures already announced, should firm up a robust strategy to tackle the challenge thrown by profiteers and hoarders. The Government has done well by directing Pakistan State Oil (PSO), Sui Southern Gas Company and Pakistan LNG Limited to import LPG, while local supplies would be auctioned transparently in five-tonne and 10-tonne lots. Companies would also be required to publish their LPG prices on their websites to ensure transparency and competition. Besides official import of the commodity, the Government should activate the administrative machinery to check prices, impose fines on profiteers and cancel licenses of distributors if they persist with their blood-sucking approach. There are also reasons to believe that there was complete lack of coordination among relevant Government agencies and departments. Otherwise, prudence demanded that the Government should have made alternate supply and import arrangements before (abrupt) closure of the border with Iran, apparently under pressure of the United States. LPG being a necessity, the Government should have used its good offices with the US administration to get relaxation for its import from Iran despite American sanctions. The alarming increase in the price of LPG demands urgent measures for reversal of the uncalled-for hike but the statement of the Petroleum Minister is somewhat disappointing as he said additional revenue generated through the auction mechanism would be channeled into a price stabilization fund and a vulnerable consumers’ protection fund. This effectively means the Government intends to replicate the fuel relief programme of the Prime Minister whereas people are demanding withdrawal of the petroleum levy to ensure both citizens and the economy benefit from the relief. Other measures to help improve the situation could include diversification of imports, binding importers and major marketing companies to maintain a mandatory minimum stock inventory ahead of winter, abolish discretionary quotas for distribution of local LPG production, action against cartelization and coordinated campaign against illegal shop-level overcharging.
