LPG prices to rise as OGRA imposes a levy of PkR 11,485/ton – Alfalah Securities Limited
Karachi, September 21, 2011 (PPI): The Oil and Gas Regulatory Authority has imposed a petroleum development levy (PDL) of PkR 11,485 per ton on Liquefied Petroleum Gas (LPG) in order to bring local prices of LPG in par with imported prices.
According to the Alfalah Securities Limited, on the directives of OGRA, the maximum base stock price of LPG (including FOB Saudi Aramco Contract, marine freight and import incidentals) would be fixed at PkR 83,973 per ton. OGRA has also informed 11 LPG producers to charge their base stock price at PkR 83,973 per ton for September, from previously PkR 72,400 per ton. The PDL imposed would jack up LPG prices by at least PkR 12 per kg which would be passed on to the consumers. At present, the prices of LPG in the local market ranges between PkR 135-140 per kg and would now reach to PkR 150 per kg after incorporation of the PDL. OGRA claims that the new levy imposed would bring the prices of local LPG in par with imported LPG prices and therefore would help in reducing prices. However, it is expected that the results would be entirely opposite as the consumers would be worse affected by the price increase and would cut their consumption.