As per the LPG Policy 2016, LPG Marketing Companies registered with the Oil and Gas Regulatory Authority (OGRA) are importing Liquefied Petroleum Gas (LPG) as per market demand and the government has no role thereon/therewith however, after February 2018, OGRA is notifying LPG prices on the following guiding parameters:
- Producers‟ Price to be determined monthly based on Saudi Aramco Contract Price (Propane 40%: Butane 60%)
- Marketing/ Distribution Margin @ Rs 35,000 per MT = Rs. 413 per Cylinder
- Petroleum Levy on indigenous production © Rs 4.669 per MT = Rs 55 per Cylinder
- 18% GST on above (i), (ii) and (iii) Whereas the imported LPG meets the maximum OGRA notified LPG consumer prices as above.
Following Taxes are applicable on the import of LPG;
- GST 10%
- Excise & Taxation 1.25%
- Terminal Charges 13% Sindh GST US$ 32 plus
- Advance Income Tax 5.5%
- Port Qasim Royalty US$ 6
Reasons of increase in LPG prices in February 2023
LPG prices are linked with International Bench Mark e.g. Saudi Aramco Contract Price (CP) and US Dollar exchange rate.
In February 2023, the LPG prices were increased due to following factors resulting in increase in LPG consumer price from Rs 2,411 to Rs 3,141 per 11.8 kg cylinder:
- Increase in Saudi Aramco Contract Price from US$ 599/MT to US$ 790/MT.
- Increase in US Dollar to PKR exchange rate.
- Increase in General Sales Tax (GST) from 17% to 18%.
