Pakistan to auction domestic LPG and open sector to private imports
Petroleum Minister Ali Pervaiz Malik said the government will also protect low-income households and direct the Competition Commission to curb cartels.
Pakistan will auction domestic LPG and let private firms import it to curb costs, Petroleum Minister Ali Pervaiz Malik said on Tuesday, the state broadcaster Radio Pakistan reported.
Malik said the government would try to keep gas flowing through the pipeline network during breakfast, lunch and dinner hours.
He said additional LNG would be imported if necessary, and rationing could be considered if circumstances demanded it.
Pakistan's annual LPG demand is about 2.4 million tonnes, Malik said, while domestic production is around 2,000 to 2,500 tonnes per day.
The rest of the requirement is met through imports, including supplies previously received through the western border and sea routes.
Disruptions through the western border have created additional challenges, he said, which highlights the need to diversify import sources.
Prime Minister Shehbaz Sharif has directed the formulation of a comprehensive energy security framework covering storage, refineries and LPG import infrastructure, Malik said.
State-owned companies, including Pakistan State Oil, Sui gas companies and Pakistan LNG Limited, have been told to arrange bulk LPG purchases through government-to-government and business-to-business agreements.
Importing companies will publish their monthly procurement costs, including Saudi Aramco's contract price, premiums and freight charges, on their websites, the minister said.
The existing quota system for locally produced LPG will be replaced with a transparent auction in lots of five to ten tonnes, with results made public, he said.
Ten percent of the quota reserved for hard areas will be distributed through state-owned companies in consultation with provincial authorities.
Additional revenue from the new mechanism will go into a Price Stabilisation Fund and a Vulnerable Protection Fund to provide subsidized LPG to deserving consumers.
The Competition Commission has been directed to prevent market manipulation and cartels, while the regulator OGRA will improve transparency in its licensing procedures.
Malik estimated that imported LPG, including premiums and other costs, could range between 450 and 500 rupees per kilogram.
Targeted relief will be provided through a differential fund, with subsidized rates to be determined by the Prime Minister, he said.
Speaking at the same news conference, Information Minister Attaullah Tarar said Shehbaz Sharif had put the protection of public interests first during the ongoing crisis.
Tarar said the government had not allowed any additional burden to fall on the people.
He said the government had transferred profits earned by refineries to the public, an initiative he said had never been undertaken in the country's history.
