PM rejects auction plan for LPG produced by state-owned companies over lack of legal framework

Prime Minister Shehbaz Sharif has rejected a plan to auction liquefied petroleum gas produced by state-owned companies, according to Dawn, saying the scheme lacks a legal and regulatory base. The proposal could have pushed prices up by at least 15%. The premier has directed officials to draft a full policy and legal framework before any such auction is introduced. He also refused interim arrangements, effectively stopping the auctions three public-sector producers ran on August 10.

The scheme would have tied domestic LPG prices to import parity and widened margins for marketing firms and distributors. Public-sector producers were to offer lots of five tonnes a day on a pilot basis, in place of the current quota system. Oil and Gas Development Company Limited, Pakistan Petroleum Limited, Pak-Arab Refinery Company and Government Holdings Private Limited took part, and the top bid reached Rs205 million for a three-year supply arrangement.

Dawn also said open-market LPG has reached about Rs5,000 per domestic cylinder, against the OGRA notified maximum of Rs3,296, a premium of about 52%. Imports through Taftan remain negligible, more than 25,000 tonnes await clearance at Rahimdan near Gwadar, and Hormuz disruptions have restricted shipments. Current market players have taken the auction to court, arguing that existing rules do not permit it.