Lahore: The new Saudi Aramco Contract Price for LPG has risen by USD 7 per MT and set at USD 471 or Rs. 48,000 per MT for the month of May.
This marks the 4th consecutive month where international prices have been at historic lows following the collapse in global oil prices. However with the exception of a handful of LPG Producers, the dominant state owned LPG Producers including Oil & Gas Development Company Limited, Pak Arab Refinery Company and Pakistan Petroleum Limited continue to maintain prices above the Saudi Aramco CP at Rs. 52,000 and Rs. 54,000 per MT respectively.
“LPG Marketing Companies have suffered heavy losses for the last two months as LPG prices have witnessed a decline of over 50% given the flood of cheap imports and the reluctance of state owned LPG producers to reduce their price” said Mr. Farooq Iftikhar, Chairman of the LPG Association of Pakistan.
Retail LPG prices have plunged from a high of Rs. 150 per kilo in January to Rs. 75 per kilo as of today. LPG Companies are incurring a loss of Rs. 50 per each domestic cylinder sold.
“LPG Companies have paid hefty premiums to OGDCL for purchasingallocations and some continue to give away as much as 67% of their profits to PPL as part of a profit sharing formula. Yet these Producers continue to charge prices above Saudi Aramco CP as a testament to their monopoly status,” said Mr. Iftikhar.
We are grateful to the Ministry of Petroleum & Natural Resources and the management of SSGC for reducing their prices to match Saudi Aramco CP of April, which provided some relief to companies lifting product from Sindh. However all LPG producers need to set their prices in line with international prices, if consumers are to be passed on the full impact of a lower price” said Mr. Iftikhar.