Pakistan’s local LPG production declines from 2000 tons to 1200 tons a day

Islamabad, April 07, 2011 (PPI): The country is confronting biggest challenge of widening gap between demand and supply of LPG and its depleting local production from 2000 tons per day to around 1200 tons per day, Federal Minister for Privatization Syed Naved Qamar said.

Addressing the 5th Annual Public Conference of the LPG Association of Pakistan here on Thursday, minister said despite of government efforts to enhance local production of LPG in the country it observed decline as compared to last year. Main reason of declining LPG production was depleting fields and the non-augmentation of additional production. Through government efforts, the minister assured participants that LPG production would increase substantially by 2012.

Though the LPG constitutes about one percent of the energy mix of the country but it is very important because it brings hope to those who are not privileged to receive natural gas facility. Naveed Qamar claimed that the government has already removed all impediments for import of LPG including waiver of income tax at the import stage. However, the industry’s demand for removal of GST on import of LPG is not possible in view of the commitment by the government dome with international community and the fiscal constraints in the country.

The minister also assured the stakeholders that appropriate steps would be taken to discourage smugly of sub-standard LPG from Iran. He also stressed for ensuring safety standards of cylinders and other related equipment. The best options for it to bring in license regime the entire supply chain of LPG with no compromise on quality standards. The market is open and the stakeholders have to adopt it, the minister maintained.

The LPG Association of Pakistan (LPGAP), Publicity Channel and Energy Update organized the 5th International LPG conference & exhibition “LPG Exp Con 2011. Earlier Chairman LPG Association of Pakistan Iqbal Z. Ahmed addressing the participants said a lot of development has been taken place in LPG sector including establishment of a single Auto-gas station in Sialkot.

Main challenge for the sector was rising prices internationally and declining trend in local production. “We are self-regulatory in safety standards and the government has to trust the industry”, he added. The LPGAP chairman further suggested the government to bring the entire supply chain including distributors under OGRA.

Naeem Qureshi Chairman Organizing Committee of LPG conference said that the conference has provide a chance to all stakeholder to share their experiences with each other and also take future line of action for the development of the LPG sector in the country.

A large number of stakeholders in their presentations highlighted importance, challenges, and future plan for development of LPG sector.

They said that imports of LPG have not registered impressive improvement but local production is essential for revival of growth of the sector. Keeping in view severe shortage of natural gas in the recent winter season, a lot of vehicles have been converted from CNG to LPG, which is relatively cheaper fuel than the first one. The OGRA safety standards are properly followed while conversion from CNG to LPG. The cost of LPG is about 30 percent lower than the petrol and CNG in terms of mileage and cost, the stakeholder claimed. The stakeholder also suggested that frequent changes in rules and regulations by the government, OGRA and others badly affected the sector. There is an urgent need for consistent policy for long period of time so that the industry enables to adjust itself accordingly.

Chairman All Pakistan LPG Distributors Association Abdul Hadi Khan informed the participants that during the outgoing winter season the demand for LPG decreased to 1300 ton per day from usual winter demand of 2100-2200 tons. It is due to higher increase in its prices and as a reaction, a large number of people give up use of LPG. He demanded of the government to waive off 17 percent GST on import of LPG during Oct, Nov, Dec and Jan so that the consumers might get the LPG on lower prices.

Fasih Ahmed Director Associated Group, Jamal Akbar Ansari, Chairman Akbar Associates, Belal Jabbar, Mujatab Hameed, Emran Jamli, Saif Ahmed, A.Baist Landi Renzo Pakistan, Saif Asif, Hassan Shahid , Bushra Aitezaz and other experts deliver speeches and presentations.