OGRA’s Fail Control of LPG Prices Irks Petroleum Ministry
The unjustified LPG price hike is now in notice of the Ministry of Petroleum and Minerals and they have question OGRA (the regulatory) authority on its failure to control the price in the domestic market. The report from Business Recorder gives the details.
Ministry of Petroleum and Natural Resources has expressed serious reservations over the failure of Oil and Gas Regulatory Authority (Ogra) in playing its due role for controlling LPG prices in the domestic market. Sources revealed to the Business Recorder that the Ministry in a strongly worded letter to Ogra has directed the authority to play its due role and take action against LPG marketing companies that are involved in inflate increase in LPG prices.
According to existing LPG policy, LPG companies are allowed to charge LPG prices that do not exceed the Saudi Aramco Contract Price (CP). “But Ogra has let LPG marketing companies raise the gas price many times during the month of Ramzan,” they said. Petroleum Ministry officials said that delay by Ogra in taking action against LPG marketing companies had raised questions about its role. The role of Ministry of Petroleum is to formulate policies whereas Ogra is a regulator and its responsibility is to ensure a price that does not exceed CP.
When contacted, Executive Director (Operations) Ogra, Sarmad Aslam confirmed that Ogra had received a letter from Ministry of Petroleum and would give its response soon. He said that due to closure of Parco refinery, country was facing LPG shortfall leading to a hike in its price. He maintained that Parco would take around 6-7 days to resume operation. He claimed that Authority had started action against undue hike in LPG prices from the weekend just past.
ECC in its meeting held on December 12, 2007 had decided to allow LPG producers to fix LPG prices on monthly basis by de-linking it with CP and disallowed Ogra to notify LPG prices on monthly basis. Ogra places LPG prices notified by marketing companies on monthly basis on its website. “However, LPG marketing companies allowed to notify prices once in a month, raised LPG prices many times during Ramazan which was against the spirit of the ECC decision”, the sources maintained.
Ogra was also authorised to monitor producer and consumer prices to retain them at reasonable level within the parameters of LPG Policy 2006. It was also decided that LPG producer price should not exceed the CP. Sources said that LPG prices in international market stood at $589 per ton on August 20 but LPG marketing companies were charging a higher price. Government’s flawed de-regulation policy of LPG prices has put the consumers at the mercy of LPG mafia on one hand and wiped out the importers on the other side, sources maintained. Ministry of Petroleum wrote a letter to Ogra after Petroleum Minister Syed Naveed Qamar had taken notice of unjustified hike in LPG prices by LPG marketing companies.
Importers are of the view that after de-linking the price from CP, the supply chain had suffered because of price difference between locally produced and imported LPG. Importers have also alleged that some powerful elements in LPG sector suddenly reduce prices to discourage importers when their shipments are about to reach Karachi causing a difficult situation for them to offload the imported product in the market.
