ISLAMABAD - The federal government and LPG industry on Thursday failed to reach understanding on LPG consumers’ price.

The government recommended the stakeholder of LPG to fix Rs895 for domestic cylinders. However, the LPG companies and distributors have declined to the government’s proposed price for domestic consumers saying that it was a reasonable price. LPG dealers association has said that the proposed price was not feasible for LPG imports and demanded to take weighted average of locally produced and imported gas to determine price. A meeting between Petroleum Division and LPG distribution and marketing companies remained inconclusive over determination of LPG prices for domestic consumers.

A committee constituted to work out the LPG consumer prices for issuance of guidelines to Oil and Gas Regulatory Authority (Ogra) held a meeting on Thursday. Additional Secretary Nasir Jami headed the meeting which was attended by representatives of LPG producing, marketing and distributing companies.

The committee was constituted to work out LPG consumer prices for issuance of guidelines to Ogra for their necessary notification. After the meeting, LPG Distribution Association Chairman Irfan Khokhar told the media persons that the propose consumer price of the federal government was unrealistic as current price of domestic cylinder was ranging from Rs1,200 to Rs1,400 depending on regions. He said that LPG stakeholder suggested a formula in the meeting to calculate the actual price of LPG consumers. The price of LPG should be based on weighted average of locally produced LPG and import price of LPG.

He further said that the government proposed a profit of Rs24,000 per ton for LPG distribution and marketing companies. However, LPG marketing companied has sought Rs29,000 per ton which included margins of LPG distributors. However, Khokhar suggested separate profit of dealers at 15 percent on sale price of LPG. He said that imports should be made feasible for smooth supply of LPG to avoid the demand supply issue.

“If imports are reduced, there would be demand-supply issue in winter season causing shortage and black marketing of LPG,” he said adding that there was 5.5 percent advance tax on imports of LPG and demanded to impose 10 percent petroleum levy on locally produced LPG to end disparity in prices of local and imported LPG. He said that share of imported LPG was 40 to 50 percent at present that would rise in winter season. He said that import of LPG was contributing to meet local demand of consumers.