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CNG industry questions use of LGP in transport sector

The regular shortage of the liquefied petroleum gas (LPG) in residential sector along with its frequent price variations at consumer level has posed a serious question on the government’s policy to utilise petroleum gas in the transport sector, CNG industry people said.

They said that the sector with its disorganised infrastructure and complex supply chains result in negative impact on the prices that normally stay over Rs150 per kilogram in the peak winter season.

On the other hand, the LPG is at present facing shortage domestically to cater to the local demand, mainly for households and commercial sector. In this regard, the high quantity imports of fuel gas are required, which is turn will be costlier than its local supply, they added.

“Therefore, the uniformity in LPG prices is impossible even after several attempts of Oil and Gas Regulatory Authority (OGRA) in the past to maintain price level affordable,” a CNG association representative said.

Recently, the authority again tried to control retail prices of imported LPG at Rs96 per kg, which was ignored by importers who suspended supplies.

Adding fuel to fire, the consumers are at the mercy of local distributors and retailers who get opportunity to jack up LPG prices on the shortage of supplies particularly in the month of Ramadan, he added.

According to reports, stocking of LPG is in full swing to push its retail prices to maximum level while creating demand through supply shortage.

Energy experts are of the view that government was not likely to manage the huge supplies to transport sector in the scenario when the government had failed to ensure petroleum gas to small domestic sector, which constituted only 10 percent of the overall market.

Neither the OGRA could regulate local marketers and distributors nor it could handle importers of a small market of LPG business, industry officials said. They suggested to the government that it should not derail the system of energy industry and avoid implementing its ill-conceived plan of replacing CNG with LPG in the best interest of consumers and industry stakeholders. They added that CNG sector was well-organised and it’s a bigger sector than LPG, which need not to be disturbed in order to avoid any distortion in transportation and business cycles.

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