Chairman LPG Association of Pakistan Farooq Iftikhar has urged the upcoming government to make LPG an important part of the energy policy that would be equally beneficial for the government and LPG sector of Pakistan.
In a meeting of LPG Association of Pakistan, Farooq Iftikhar said that LPG is an important sector and has the ability to fulfill most of the energy demands of the country but it is unable to play its due role because of unfavorable policies, smuggling and import of low-quality LPG on a large scale.
Chairman LPGAP 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.
Mr. 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 almost Rs. 10,000 per MT between indigenous LPG and 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. 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 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 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 are facing closure because of continuous loss.
Chairman LPGAP said that both auto sector & Industry, which were previously using LPG are shifting back to CNG because of availability of both LNG and Natural Gas to them in adequate quantity at 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.