LAHORE - As the Sui Southern Gas Company Limited (SSGC) has announced to increase its LPG price by Rs 9,435 per ton or Rs111 per 11.8kg cylinder, the LPG Association of Pakistan (LPGAP) has slammed this move.

“SSGC’s price increase of over 18 percent is unjustified and unwarranted and it completely defeats government efforts to ensure that LPG remains within the reach of the masses,” said Farooq Iftikhar, chairman of the LPGAP. “The government is demanding that retail prices of LPG decrease yet its own producers are raising prices beyond reasonable levels during peak demand season. This will have an immediately adverse effect on retail prices.”

Government-owned SSGC notified the new price on Wednesday, Dec 9, but has applied it retrospectively from Dec 5. Inclusive of taxes, SSGC’s latest price is Rs. 61,028 per ton or Rs. 718 per 11.8kg cylinder. This price includes a premium that SSGC is now charging. Its previous price was Rs. 51,579 per ton or Rs. 607 per 11.8kg cylinder and did not include a premium.

Iftikhar said LPG prices are expected to continue rising since SSGC intends to raise the premium it is charging from Rs. 4,551 per ton to Rs. 7,777 per ton with effect from Jan. 1.

“According to government directives, producers are not permitted to charge more than the Saudi Aramco Contract Price,” said Iftikhar. “But LPG producers across the board are continuing to brazenly violate government policy by extracting millions of rupees from OGRA-licensed LPG marketing companies in the form of premiums that ultimately have to be paid by consumers.”

The LPGAP chairman urged the Oil and Gas Regulatory Authority (OGRA) and the Ministry of Petroleum and Natural Resources to take immediate notice of the malpractices and pricing distortions being introduced into the market by public sector LPG producers.

“The failure to acknowledge and rectify these highly serious distortions jeopardizes the public interest,” said Iftikhar. “The government must ensure that public sector LPG producers operate in a transparent and equitable manner without compromising the interests of consumers.”