LPG prices increased by Rs60/kg

The Nation  |  Feb 01, 2023

ISLAMABAD       -   Following a hefty increase in POL prices, the government on Tuesday hiked the rate of indigenous liquefied petroleum gas (LPG), also called a poor man’s fuel, by Rs60/kg which will enhance the price of 11.8kg domestic cylinder by approximately Rs704.

As per the notification issued by the Oil and Gas Regulatory Authority (OGRA) the price of indigenous liquefied petroleum gas (LPG) has been increased by more than 29pc or Rs60/kg for domestic and commercial consumers for the month February 2023.

According the notification, the price of  LPG has been increased from Rs204/ kg in January to Rs264/kg in February. As a result of the hike, the price of 45.4kg commercial cylinder will go up by Rs2,724 and will be sold at Rs11,985 in February against the price of Rs9278 in January.

Similarly, the domestic 11.8kg cylinder price will go up by Rs703.57 from Rs2,411.4 in January to Rs3,115 in February. As per the OGRA calculation, the producers’ price of LPG (propane 40 percent and butane 60 percent) has been determined at 185933.4/ton. This price included excise duty of Rs85/ton while excluding the petroleum levy of Rs4,669/ton. Under this head, the producer price of Rs2194/11.8kg cylinder has been worked out. The marketing/ distribution/transportation margin has been set at Rs35,000 per ton (Marketing Margin of Rs17000/ton, distribution margin of Rs10,000/ton, and transportation margin of Rs8000/ton) or Rs413 per cylinder. Prior to imposition of a 17% general sales tax, the consumer price would be Rs190,602.37/ton, while the price of the 11.8kg cylinder is Rs2249 per cylinder.

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Additionally, a GST of 17 percent on Rs190,602.37/ton would be Rs32,402/ton or Rs382.3 for a 11.8kg cylinder. The maximum producer price with GST would be Rs223004.8/ton or Rs2631.5 per cylinder. Ironically, poor consumers are double taxed, as they have to again pay 17% GST of Rs5950/ ton or Rs70.21 per 11.8kg cylinder on the marketing/distribution margin of Rs35,000 per ton.

It is worth to mention here that for the month of January, OGRA reduced the LPG price by 11.6 per kilogram. The domestic cylinder price was reduced by Rs136.86 from Rs2,548.29 in December 2022 to Rs2,411.43 in January 2023.

On 29 January, the government had also substantially increased petroleum product prices, especially petrol, and diesel by Rs35/litre each and kerosene and light diesel oil (LDO) by Rs18/litre each. The new LPG price will be effective from February 1 to February, 28, 2023.

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