Hi Everyone! I hope you are all doing well. Welcome back to another blog. This article will discuss the topic in detail “Government Increases LPG Prices to Rs. 233.89 Per Kg with an increase of Rs. 4.89”. The Pakistan government has recently announced an increase in the price of liquefied petroleum gas (LPG) to Rs. 233.89 per kg, up from the previous price of Rs. 229 per kg. As a result, consumers who rely on LPG for cooking and heating purposes will be heavily impacted by the increase of Rs. 4.89.
To better understand the reasons behind this price hike, it’s important to examine the factors that contribute to the cost of LPG. One of the main factors is the international market price of crude oil, which has been steadily rising in recent months. Additionally, the devaluation of the Pakistani rupee against the US dollar has made imports more expensive, further driving up the cost of LPG.
Following the government’s announcement of an Rs. 4.89 per kg hike in the rate list, gas sellers have increased the prices of Liquefied Petroleum Gas (LPG). As a result, the official rate of LPG for the month of May has now risen to Rs. 233.89 per kg. The demand for LPG has surged in areas using piped gas due to severe commodity shortages and delayed imports, leading to the recent price hike.
The OGRA has issued a notification stating that the price of an 11.8 kg domestic LPG cylinder will increase from Rs. 2,702.2 in April 2023 to Rs. 2,759.89 in May 2023, resulting in a hike of Rs. 57.70 in just one month. Furthermore, the price of the commercial cylinder (45.4kg) will significantly increase from Rs. 10,397 in April 2023 to Rs. 10,618.606 in May 2023.
The authorities have set the producer price of LPG (propane 40%, butane 60%) at Rs. 158,541.88 per ton. This price incorporates an excise duty of Rs. 85 per ton. However, it does not cover the petroleum levy of Rs. 4,669 per ton.
As expected, the price of the cylinder will increase to Rs. 1,925.89, while the producer price will also rise to Rs. 163,210.88 per ton. However, due to an 18 percent general sales tax imposed on the fuel, the producer price of LPG will go up by approximately Rs. 29,377.96 per ton or Rs. 346.66 per 11.8 kg cylinder.
To clarify the pricing of their products, the company has established a marketing, distribution, and transportation margin of Rs. 35,000 per ton. This margin is further divided into three parts. Rs. 17,000 per ton is allocated for marketing, Rs. 10,000 per ton for distribution, and Rs. 8,000 per ton for transportation. Additionally, it was stated that each cylinder will have a margin of Rs. 413.
It’s worth mentioning that the citizens are paying a double tax on fuel, as they have to bear the burden of 18 percent GST per cylinder in addition to the marketing and distribution margin of Rs. 35,000 per ton.
The increasing energy prices are placing a burden on consumers who are already struggling with inflated costs of basic necessities. In the near future, gas and petrol prices are expected to rise further, which will exacerbate the situation and strain people’s budgets which are already being impacted by exorbitant fuel prices.
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