ISLAMABAD: Pakistan is preparing a comprehensive policy to protect low-income households from rising liquefied petroleum gas (LPG) prices, Petroleum Minister Ali Pervaiz Malik told the National Assembly on Monday, as disruptions to gas supplies from Qatar and approaching winter raise concerns over alternative fuel costs.
Responding to a Calling Attention Notice on the sharp increase in LPG prices, Malik said Prime Minister Shehbaz Sharif had held two to three meetings to address the issue and was fully aware of the difficulties facing consumers.
The minister said progress on the proposed policy would become visible soon, adding that the government aimed to improve supplies and provide relief to deserving households through a targeted subsidy mechanism.
Government reviews LPG pricing and supply options
Malik said the Oil and Gas Regulatory Authority (OGRA) had notified a rate of Rs280 for locally produced LPG, while no comparable policy was currently in place for imported supplies.
He explained that locally produced LPG prices were also linked to the international contract price set by Saudi Aramco, which had risen to $705 per tonne, contributing to changes in notified rates.
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The government was examining supply constraints through land borders and exploring alternative imports from Oman and Saudi Arabia, he added.
The minister said additional costs associated with LPG supplies also needed to be addressed, as the existing system lacked an adequate mechanism to cover them. Treating locally produced and imported LPG differently in the market could create enforcement complications for OGRA, he noted.
Salient features of the proposed policy
The government is considering the following measures, according to the minister:
- Targeted subsidies: Provide subsidised fuel to low-income and other deserving households.
- Alternative imports: Explore LPG supplies from Oman and Saudi Arabia to address supply constraints.
- Pricing mechanism: Review the relationship between domestic LPG prices, international benchmarks and additional supply costs.
- Market regulation: Develop a mechanism to support fair competition while addressing the challenges of regulating locally produced and imported LPG.
- Improved availability: Formulate a comprehensive policy to strengthen supplies and provide relief to vulnerable consumers.
Qatar gas disruptions add to energy pressures
Malik told the National Assembly that Pakistan’s gas supply had been affected by the suspension of around 900 million cubic feet per day (MMCFD) of gas supplies from Qatar due to the war.
Read Also: Pakistan Secures Energy Supply Chain with Fresh LPG and Oil Shipments
He said the government was rationing available gas to manage the shortfall and acknowledged that demand for alternative fuels was likely to increase as winter approached.
The proposed LPG policy is expected to address the combined challenges of affordability, supply availability and market regulation. However, the minister did not announce a launch date, subsidy amount or eligibility criteria for beneficiaries.
