Ogra Announces LPG Price Hike for December 2024: Distributors and Consumers React
ISLAMABAD: The Oil and Gas Regulatory Authority (OGRA) has officially raised the prices of Liquified Petroleum Gas (LPG) for December 2024. This decision, citing fluctuations in the exchange rate, has sparked criticism from distributors and consumers alike. The rise in LPG prices, although marginal, has led to widespread concerns about the growing affordability issues in households that rely on LPG for daily cooking needs. In this article, we will explore the details of the price hike, its impact on consumers and distributors, and the ongoing issues of black marketing and price exploitation in the LPG market.
LPG Price Hike: Key Factors and Details
OGRA’s latest price adjustment for LPG comes after careful consideration of several factors, with the exchange rate playing a significant role. LPG prices are largely tied to the Saudi Aramco Contract Price (CP), a global benchmark, and the US dollar exchange rate. Despite the Saudi Aramco CP remaining stable, the fluctuation in the exchange rate has caused an increase in the cost of LPG for Pakistani consumers.
Price Adjustment: A Closer Look
In the statement issued by OGRA, the domestic price of LPG has been raised by Rs1.32 for an 11.8 kg cylinder. This marks a 0.04% increase in the overall cost. On a per-kilogram basis, the price increase translates to Rs0.11. The updated prices for December 2024 are as follows:
- The producer price for an 11.8 kg domestic LPG cylinder has been set at Rs2,513.45, which is an increase from Rs2,512.13 in November 2024.
- The consumer price for the same cylinder has now risen to Rs3,000.79, compared to Rs2,999.47 last month.
These small price hikes, although seemingly insignificant, have significant consequences for consumers who rely heavily on LPG, particularly in areas without access to natural gas.
Price Hike Breakdown
- The price of a domestic LPG cylinder has increased by Rs1.32.
- The commercial LPG cylinder price has seen a rise of Rs5.07.
- The producer price per metric tonne of LPG has gone up by Rs112.16.
- LPG is now priced at Rs254.30 per kilogram, up from Rs254.19 previously.
Distributors’ Response to the LPG Price Hike
The LPG Distributors Association has expressed dissatisfaction with the recent price adjustments. While the increase is marginal, the association points out the broader issues affecting the LPG supply chain and the impact on the prices consumers are forced to pay.
Challenges Faced by Distributors
According to Irfan Khokhar, Chairman of the LPG Industries Association of Pakistan, LPG is not being sold at the regulated prices set by OGRA. He claims that LPG is being sold at inflated prices across the country, with black marketing driving up the costs. Despite OGRA’s official notification, consumers are facing additional financial burdens as a result of these illegal activities.
Black Marketing and Its Impact
Black marketing of LPG has been an ongoing issue in Pakistan. Despite government efforts to curb this practice, the LPG market remains largely unregulated. Khokhar alleges that LPG supplies are being monopolized by a few powerful groups, which control the distribution network and inflate prices for personal gain.
This unregulated environment has left many distributors and consumers frustrated. While small retailers are often penalized with hefty fines for minor violations, the root causes of price manipulation remain largely unaddressed.
The Struggles of Ordinary Consumers
LPG: The Fuel of the Poor
LPG, often referred to as the “fuel of the poor,” is widely used in households across Pakistan, especially in rural and remote areas. It has become an essential energy source for cooking, especially in regions where natural gas supply is limited or non-existent. However, as LPG prices continue to rise, many households are finding it increasingly difficult to afford this basic necessity.
With winter approaching, demand for LPG traditionally increases. As the weather gets colder, natural gas supply tends to dwindle due to higher domestic demand, leaving LPG as the only viable alternative for cooking. The increase in LPG prices is therefore an additional burden on already-struggling households.
The Impact on Daily Life
For many consumers, even preparing a simple meal has become a financial challenge due to the rising cost of LPG. The price hike has particularly affected low-income families, who have limited access to alternative fuel sources. The current situation highlights the growing divide between the haves and have-nots in Pakistan, as inflation continues to make basic goods and services increasingly inaccessible.
Government Inaction and Call for Intervention
Despite numerous complaints from distributors and consumers, government authorities have been criticized for their lack of action to address the ongoing issues in the LPG market. The black marketing of LPG, price hikes, and the overall lack of regulation have left many feeling that the government is not doing enough to protect the interests of ordinary consumers.
Urgent Need for Government Action
Khakhor and others in the LPG industry have urged the government to take immediate steps to regulate the LPG market and ensure that prices remain affordable for consumers. They also emphasize the importance of addressing the issue of black marketing, which has exacerbated the financial struggles of consumers.
The LPG sector requires robust regulatory oversight to prevent exploitation by a few powerful entities. Without such regulation, consumers will continue to face inflated prices, while distributors and retailers will remain at the mercy of unscrupulous forces in the market.
LPG Demand Surge in Winter
With winter fast approaching, the demand for LPG has surged, particularly in the northern and remote regions of Pakistan. The natural gas crisis, which worsens during the colder months, has made LPG the go-to option for many households in need of an affordable cooking fuel source.
Limited Domestic Production and Import Dependency
Pakistan relies heavily on imports to meet its LPG demand, with around 60% of local consumption being met through imports. This dependency on international markets makes the LPG sector vulnerable to fluctuations in global prices, which can drive up costs for Pakistani consumers.
In addition, the lack of infrastructure to produce enough LPG locally adds to the country’s reliance on imports. The LPG sector in Pakistan is plagued by inefficiencies, with poor distribution networks and insufficient storage facilities exacerbating the supply challenges.
FAQs:
1. Why has the price of LPG increased in December 2024?
The increase in LPG prices is primarily due to fluctuations in the exchange rate, which have affected the cost of LPG. Despite the Saudi Aramco Contract Price remaining stable, the slight rise in the value of the US dollar has led to higher LPG consumer prices.
2. How much has the price of an LPG cylinder risen?
For December 2024, the price of an 11.8 kg domestic LPG cylinder has increased by Rs1.32, while the per-kilogram price has risen by Rs0.11.
3. What is the impact of black marketing on LPG prices?
Black marketing has led to widespread price manipulation in the LPG market, with LPG often being sold at prices higher than those set by OGRA. This practice has significantly inflated the cost of LPG for consumers.
4. Why is LPG becoming less affordable for many consumers?
LPG is becoming less affordable due to rising prices, particularly as demand increases during the winter months. This has put a strain on low-income households that rely on LPG for cooking.
5. What actions is the government taking to address these issues?
Despite complaints from distributors and consumers, the government has been criticized for not doing enough to regulate the LPG market and curb black marketing. There have been calls for stronger oversight and measures to keep LPG prices affordable.
ALSO READ:
