The federal government has directed the Oil and Gas Regulatory Authority (OGRA) and other authorities to act against suspected hoarding of liquefied petroleum gas (LPG) amid concerns about supply shortages and rising prices ahead of winter.
The directive follows reports that an 11.8kg domestic LPG cylinder was being sold for approximately Rs5000, nearly 52 percent above Ogra's notified price of Rs3296.
In a letter to Ogra's chairman and director general for LPG, the Petroleum Division raised concerns that import terminals were not collecting imported gas at the expected rate, despite imports continuing in line with domestic demand.
The division warned that delays in lifting imported LPG could indicate stockpiling intended to restrict market supply and increase prices.
It said the situation was affecting consumers in mountainous, remote and off-grid areas, where households depend on LPG for cooking and heating.
Ogra has been asked to ensure it collects imported supplies from terminals and distributes them to areas experiencing shortages.
The regulator has also been directed to take enforcement measures against hoarding and ensure that LPG is sold at government notified prices.
Provincial governments and federal agencies responsible for port operations and customs clearance have been asked to coordinate efforts to address supply disruptions.
In a statement, the Petroleum Division said the government was also pursuing changes to the distribution of domestically produced LPG to address the concentration of supplies among a limited number of companies.
Under the proposed arrangement, locally produced LPG would be allocated through a competitive process intended to provide market participants with access to supplies.
The division said the mechanism would follow the LPG Policy 2016 and include provisions to ensure distribution to mountainous and remote areas.
It added that the proposed system would allow upstream producers to receive returns on their resources while reducing concentration in the LPG market.
However, litigation has delayed implementation. The Petroleum Division said the matter was being pursued in court and that the government could exercise legal options available under the law.
The government maintained that its measures were intended to improve LPG distribution, address pricing concerns and protect consumers as demand increases during winter.
