Government to auction 90 percent of locally produced LPG

Pakistan will sell 90 percent of the liquefied petroleum gas (LPG) produced inside the country through open auctions, under a mechanism the federal cabinet approved on November 4, the Petroleum Ministry said in a statement on Saturday.

The first meeting of the LPG committee set up under the deregulated framework was chaired by the Petroleum Secretary. Federal Minister for Petroleum Ali Pervaiz Malik told the meeting that the government wanted to answer public complaints about LPG availability and unfair prices, according to the statement.

Under the arrangement, local producers will hand 10 percent of their output to state-owned LPG marketing companies for supply to hard areas. The remaining 90 percent will be offered at auctions held in the presence of the media.

The committee fixed a ceiling of 20 metric tons a day for each company taking part in an auction, which the ministry said would give all eligible bidders a fair chance. Daily LPG production will be tracked closely and the figures placed before the Prime Minister.

The committee is headed by the Petroleum Secretary. Its members are the chairman of the Oil and Gas Regulatory Authority, the managing directors of the Oil and Gas Development Company Limited and Pakistan State Oil, the president of United Energy Pakistan Limited and the Director General (Liquefied Gases).

It is tasked with overseeing auctions of indigenous LPG, reviewing market supply arrangements and assessing pricing and bidding mechanisms from time to time.

Malik said the step was taken in the public interest, particularly for consumers who cannot get LPG at affordable prices. He said the auction system would make the supply chain more resilient, strengthen energy infrastructure, ensure the fuel is distributed equitably and protect vulnerable consumers.

The minister said the objective was to give a level playing field and fair opportunities to every participating company, while improving consumer access to LPG.