By our correspondent
KARACHI: The price of liquefied petroleum gas (LPG), for the month of May, increased by Rs2,300 to Rs37,724 per tonne on Thursday following the application of last month’s contract price of $539.
Consequently, the price of 11.8kg standard cylinder might be increased by Rs27, said Hadi Khan, Chairman LPG Distributors Welfare Association. However, as yet none of the marketing companies had passed on the increase due to competition, he added.
He said prevailing rates of 11.8kg cylinder were between Rs520 and Rs540 and there was a possibility the companies would reduce their margins to absorb the price rise as the market was in an oversupplied position.
“But the Saudi Aramco contract price announced on May 3 is $30 more ($569 per tonne) over last month’s rate,” he said, warning the LPG price would shoot up when the current month’s contract price was applied in June.
He appealed to the government to abandon the practice of using previous month’s contract price to ascertain domestic rates for a given month. Excluding sales tax, previous month’s (April) contract price of $539 is $33 more than March’s $506.
Moreover, he said approximately 26,782 tonnes of LPG had been imported in the first four months of 2007 as compared to last year’s total import of 35,422 tonnes, indicating the use of LPG as an alternative fuel had increased substantially.
The price of locally produced LPG was linked with international contract rates late last year in a bid to introduce price stability.
Our Lahore correspondent adds: The LPG Distributors Association of Pakistan has deplored that the Oil and Gas Regulatory Authority has increased the LPG rate by Rs2,307 per tonne that would push up the price of 11.8kg cylinder by Rs27.50.
Chairman LPG Distributors Association Irfan Khokar said the LPG price had gone up to Rs37,739 per tonne, adding the frequent price increase would badly hurt domestic budget, particularly of those in the earthquake-affected areas.