Pakistan delays LPG auction results amid legal, policy hurdles

Pakistan's Petroleum Division has withheld the results of a liquefied petroleum gas (LPG) auction for over a week, citing legal challenges and political pressure. The auction, conducted on August 10 by three major public sector producers, could lead to a 15% increase in retail prices for LPG, often called the 'poor man's fuel,' just before winter.

The highest bidder offered Rs205 million for a three-year supply lot of five tonnes per day. This move aims to replace the existing quota-based system with standardized lots offered by state-owned entities like OGDCL, PPL, Parco, and GHPL. However, existing LPG stakeholders have legally challenged the bidding process, arguing it contradicts current policies and rules.

Sources indicate the bidding results were "mouth-watering" for state-owned entities but would significantly burden consumers, particularly those in emerging localities. The signature bonus from the auction could add approximately Rs440 to the price of every 11.8kg cylinder, on top of the marketing company's margin. The benchmark price for August was already raised by the Oil and Gas Regulatory Authority (Ogra) by about 5.4% to Rs254.32 per kg.

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mouth-watering