LPG bidding results held back for over a week as legal challenges threaten 15% price hike : report

Dawn reported that the Petroleum Division has held back LPG bidding results for over a week amid court challenges and political pressure. The August 10 auctions by the three main state producers could still push retail fuel costs up roughly 15% as winter nears. The highest offer for one lot, covering five tonnes of LPG a day for three years, reached Rs205 million.

Yearly national consumption falls within a 1.4 million to two million tonne range, and over half arrives from overseas. Some existing market players, fearing tougher competition, have taken the process to court, arguing that current policy gives no legal basis for it. Petroleum Minister Ali Pervaiz Malik directed OGDCL, PPL, Parco and GHPL to trial standardised five-tonne lots in place of the quota system.

Each tonne fills roughly 85 domestic cylinders, so one lot could supply about 425 cylinders daily. At the winning bid, that adds around Rs440 per cylinder over three years before resellers add their margins. Ogra's benchmark for an 11.8kg cylinder is Rs3,000.93, yet consumers seldom see one priced below Rs3,600. Sources say the outcome strongly favours state-owned firms but would burden consumers outside major cities.