ISLAMABAD: The government has introduced a new mechanism for the transparent auction of locally produced liquefied petroleum gas (LPG), with 90% of production to be sold through auctions in the presence of the media.
The decision was discussed during the first meeting of a committee established to ensure transparent LPG auctions, where Minister for Petroleum Ali Pervaiz Malik said addressing public concerns over the fuel’s availability and unfair pricing is a government priority.
He said this during the first meeting of the committee established to ensure a transparent auction of LPG in Islamabad.
The minister said the new auction system would help ensure fair distribution of LPG, stability of the supply chain and energy security.
He said all eligible companies will be provided with equal opportunities to participate in the auction.
Malik said the government aims to ensure better availability of LPG to consumers at reasonable prices.
During the meeting, the committee chaired by the secretary of petroleum said that under the new mechanism, local LPG producers would allocate 10% of their production to government-owned marketing companies to meet the needs of remote areas.
The remaining 90% of locally produced LPG will be sold through a transparent auction in the presence of the media.
The committee said each company would be allowed to acquire a maximum of 20 metric tons of LPG per day through the auction.
Earlier this week, the federal cabinet approved a broader LPG policy directing four state-owned enterprises (SOEs) to re-enter the import business to ease supply shortages and promote competition. The government also plans to provide subsidised LPG at Rs300-350 per kilogramme to deserving consumers under the Benazir Income Support Programme (BISP).
The policy comes amid an LPG shortage linked to disruptions along the western borders, with prices in the open market soaring well above the official rate.
According to The News, the government has drawn up a plan to invest approximately $1 billion in expanding the country’s LPG infrastructure over the next three to five years, including the construction of additional import terminals, storage facilities, cylinders, filling plants and transportation capacity.
“The proposed investment aims to strengthen the country’s LPG supply chain and meet the rapidly growing demand for the fuel amid declining domestic natural gas production and increasing reliance on imports,” a top official of the Petroleum Division said.
“Pakistan’s existing LPG infrastructure comprises approximately 100,000 metric tonnes (MT) of cumulative storage capacity, including around 14,000 MT at seaports, with the remainder located inland. The country also has a fleet of approximately 2,600 LPG bowsers and nearly 5 million cylinders in circulation. However, the existing infrastructure is considered inadequate to meet the country’s growing energy requirements.
