Chairman LPG Association of Pakistan (LPGAP) Farooq Iftikhar has feared that LPG no longer will remain a cheap fuel for low income Citizens because of Petroleum Development Levy (PDL).
Farooq Iftikhar said that PDL levied by the Government will further erode buying power of the consumer and hit them hard. Local producers will feel the punch soon as they instead of absorbing PDL have passed on the same to Marketing Companies. Importers and Distributors are having a field day in light of Government bias towards local LPG Marketing Companies.
MP&NR fails to check substandard LPG imports at the cost of local production as local producers totally ignore Signature Bonus collected by them from allottees from calculation while announcing producer price. MPNR must understand that as production in Iran and Kurdistan region of Iraq have witnessed a sharp increase, with both countries vying for a share of the LPG market in the region. This itself has set off a price war amongst LPG exporters.
MP&NR must understand that Saudi Aramco contract price cannot be used for bench marking local producer price as that is FOB price, which means that it includes product transport cost from their production facilities to the Port. In essence if CP is to be a benchmark in Pakistan, the cost of transportation of product should be deducted from the Producer Price.
A higher Producer Price Makes LPG more costly and this is evident from the fall in its consumption in the month of October. Low sales are a direct result of LPG losing its competitiveness to CNG and other fuels.