According to Dawn, Prime Minister Shehbaz Sharif has formed an eight-member ministerial committee to review a proposed set of reforms for the liquefied petroleum gas (LPG) sector submitted by the Petroleum Division.
What happened
The prime minister ordered the creation of the committee following protests from LPG marketing companies and dealers, who expressed dissatisfaction with the lack of industry consultation regarding the new framework. Led by the petroleum minister, the team includes cabinet ministers, advisers, and energy officials. The panel has been given one month to examine the reform package, cylinder standards, and the local LPG framework before submitting a comprehensive report to the prime minister.
Key facts
A cabinet summary outlines several major structural changes proposed for the sector:
- State-owned enterprises (SOEs), including PSO, Sui companies, PARCO, and Pakistan LNG, would enter the LPG import market and calculate monthly pricing using an import-parity model linked to Saudi Aramco rates and actual import expenses.
- The Oil and Gas Regulatory Authority (Ogra) would cease issuing monthly LPG price notifications.
- Financial proposals from bidders for SOE imports would be exempt from publication on the PPRA website to align with general market practices.
- Ten percent of domestic LPG production would be allocated to state marketers to supply remote areas like Gilgit-Baltistan, while the remaining 90 percent would be auctioned monthly to prequalified bottlers.
- Excess funds generated from local and import price differentials would be directed into a dedicated public account, audited by the Auditor General of Pakistan, to provide targeted subsidies via the Benazir Income Support Programme (BISP).
- Margins for LPG marketing and importing firms would increase from Rs35,000 to a minimum of Rs50,000 per tonne as an inflation adjustment.
Why it matters
As reported by Dawn, supply disruptions—including halted trade at the Iranian border and reduced sea shipments—have caused market prices for an 11.57kg cylinder to climb to between Rs6,000 and Rs7,200, compared to Ogra's official benchmark of Rs3,296. Industry representatives warn that state enterprises have limited experience in importing LPG and argue that relying solely on Saudi pricing benchmarks could further drive up costs for consumers, as much of the private supply originates from Iran and Oman.
Source: Dawn - Home · Published October 31, 2026 · Photo by Zulfugar Karimov on Unsplash
