LPG Prices Surge Rs100 Per Kg as Industry Demands Weekly Revisions

Pakistan's liquefied petroleum gas (LPG) sector has called for a shift from monthly price notifications to daily or weekly adjustments after a sharp Rs100-per-kilogram increase linked to interruptions in supplies arriving through Iran, Dawn reported.

Industry representatives are also seeking an end to the practice of linking domestic LPG prices to Saudi Aramco's Contract Price (CP). They maintain that the benchmark does not accurately capture Pakistan's current import costs, as the country obtains substantial LPG supplies from Iran, Oman, the United Arab Emirates and Iraq.

The latest demand follows the closure of the Rahimdad-250 border crossing and the cancellation of certain trade exemptions applicable to Iranian imports. These developments have reportedly left more than 4,500 tonnes of LPG stranded on the Iranian side of the border.

Mohammad Ali Haider, vice chairman of the LPG Marketing Association, which represents over 200 companies, said prices had risen by Rs100 per kilogram during the weekend. He cautioned that the upward trend could continue without timely government intervention.

According to Haider, the Oil and Gas Regulatory Authority's (OGRA) system of announcing prices for an entire month in advance no longer corresponds with actual import expenses. He said the arrangement was also making LPG imports unattractive for major state-owned enterprises.

Based on industry estimates, Pakistan uses nearly two million tonnes of LPG annually. Local production meets around 30% of this demand, while the remaining 70% is supplied through imports.

Approximately 250,000 tonnes of imported LPG enter the country through Port Qasim. Nearly one million tonnes arrive through routes associated with Iran, including the Taftan, Mand and Rahimdad-250 crossings.

Taftan has been shut for almost six months due to security concerns. Meanwhile, repeated interruptions at Mand have increased the country's dependence on the Rahimdad-250 crossing.

Import difficulties have worsened following October 16 memorandums issued by the Ministry of Commerce, which withdrew electronic import form exemptions for Iranian imports and consignments moving through Iran to Central Asian countries and Azerbaijan.

Industry stakeholders said Iranian LPG had previously been available at the border for $100–150 per tonne less than Saudi Aramco's benchmark price. However, insurance and freight expenses have risen following the conflict, reportedly pushing import costs to approximately $300 per tonne above the CP benchmark.

Representatives of the industry argue that prices should be updated daily or weekly, as is done for petroleum products, to account for changing international market rates, transportation costs and supply conditions.

They also said the current monthly pricing arrangement was discouraging state-owned companies, including Sui Southern Gas Company, Sui Northern Gas Pipelines Limited and Pak-Arab Refinery, from importing LPG. These companies reportedly face concerns over potential financial losses and possible accountability investigations.

Disruptions have placed additional pressure on imports passing through Gwadar, where freight charges have reportedly climbed from $60–80 per tonne to as high as $380 per tonne.

The LPG Marketing Association has called for the government to reconsider the national LPG policy through consultations with industry stakeholders. It has specifically sought a revision of the marketing margin, which was set at Rs35,000 per tonne in 2016.

The association has further proposed digitally tracking LPG imports and distribution and requiring OGRA to publish prices on its website every day. These measures, it says, would improve transparency and limit opportunities for manipulation in the market.

Industry representatives have warned that continued import disruptions alongside increased winter consumption could intensify the threat of hoarding, illegal market sales and further price hikes, with remote and mountainous communities particularly vulnerable.