In response to declining global energy costs, the Oil and Gas Regulatory Authority (Ogra) cut the price of domestic liquefied petroleum gas (LPG) on Thursday by around Rs37 per kilogram. This resulted in a 16 per cent decrease in the price of an 11.8 kg domestic cylinder for June.
Ogra announced that the price of LPG would be Rs197 per kilogram in June as opposed to Rs234 in May. As a result, the price of a household 11.8 kg cylinder was set at Rs2,322 as opposed to Rs2,760 the month prior.
On the other side, the cost of a commercial cylinder (45.4 kg) dropped from Rs10,619 in May to Rs8,939, a reduction of Rs1,680. For the first time, Ogra also announced that while the price of locally produced LPG has been set, the same would also be true of imported LPG.
A senior Ogra official noted that previously, the regulator had been in charge of setting local prices due to the relatively small (20%) imports. Due to the lack of local petrol, however, the traders and LPG dealers began to increase the costs of both products while misleading the customers into believing they were delivering imported goods.
The Ogra started setting the same price for both local and imported products as it was impossible to distinguish in the market whether consumers were purchasing local or imported LPG now that the situation had radically altered with the share of imports rising to about 50%.
As a result, it has this time announced the maximum price of domestic LPG, which must be adhered to at all points along the supply chain for both domestic and imported LPG.
The producer price of LPG (propane 40 percent and butane 60 per cent) has been calculated by Ogra to be Rs127,070 per tonne for June, down from Rs158,542 per tonne in May. An Rs85 per tonne excise levy was incorporated into the increased price. The producer price for an 11.8-kilogramme cylinder was calculated as Rs 1,499 as opposed to Rs 1,871 last month.
The highest producer price was calculated at Rs155,452 per tonne for June compared to Rs192,588 per tonne in May after adding the petroleum levy of Rs4,669 per tonne and the 18% sales tax of Rs23,713 per tonne for June (as opposed to Rs29,378 per tonne in May). Thus, the maximum producer price for the residential 11.8kg cylinder was determined to be Rs1,834 per kg for the current month as opposed to Rs272.55 per kg the previous month.
The maximum producer price was increased by Rs35,000 per tonne for marketing, distribution, and transportation costs, in addition to an additional 18% GST (Rs6,300 per tonne on this margin). In contrast to the residential cylinder’s price of Rs233,889 per tonne or Rs2,760 per 11.8kg, the consumer end maximum LPG price for June was set at Rs196,752 per tonne (Rs2,322 per cylinder of 11.8kg).