LPG industry urges Ogra to revise its pricing formula

The All Pakistan LPG Industry Organising Committee has urged the Oil and Gas Regulatory Authority (Ogra) to immediately revise its LPG pricing formula and restore secure transportation routes through Balochistan, warning that delays could trigger a severe supply shortage as demand rises from mid August.

 

In a statement issued on Tuesday, the committee's central leader, Khawaja Nouman Ahmed, said the industry had already raised concerns over a potential LPG crisis, citing Ogra's pricing mechanism and other structural issues affecting the sector.

 

Following an industry conference, a 20 member delegation met with Ogra's senior management and officials from the Petroleum Division of the Ministry of Energy to present the industry's concerns. Ahmed welcomed the discussions but stressed that they must now be followed by practical policy measures.

 

According to the committee, the current LPG pricing formula does not accurately reflect the cost of imported LPG and related expenses, making it difficult for companies to operate on a sustainable basis. Ahmed also highlighted security challenges affecting LPG transportation, particularly through Balochistan, as another major obstacle to maintaining adequate supplies.

 

The committee argued that resolving both pricing and security issues would stabilize LPG prices, improve product availability, and allow producers, distributors, and other businesses to operate without facing unnecessary enforcement actions and penalties.

 

Ahmed added that stronger supply would also benefit consumers by helping reduce market prices. He noted that LPG inventories have fallen to their lowest levels due to disruptions in imports caused by tensions around the Strait of Hormuz and other supply chain challenges.

 

He explained that the industry typically builds inventories during the low demand summer months to prepare for winter consumption. However, weak imports this year driven by unfavorable market conditions and government policies have prevented companies from creating the usual seasonal stockpile.

 

Ahmed called on the government to urgently revise Ogra's notified LPG prices to reflect actual import costs and ensure safe transportation routes through Balochistan. He warned that with seasonal demand expected to increase from mid-August, immediate action is needed to facilitate imports and avoid supply disruptions.

 

He cautioned that failure to address pricing and logistics issues could result in a serious LPG shortage during the winter months, placing the greatest burden on domestic consumers.

 

The committee reiterated its willingness to work with the government to strengthen energy security but stressed that without policy reforms and a reliable supply chain, the LPG industry may struggle to meet the country's winter demand.