PLPGMA expresses concern over LPG Policy 2021

by index360

Lahore: Chairman Pakistan LPG Marketers Association (PLPGMA) has demanded of the Oil & Gas Regulatory Authority to take stakeholders on board on proposed LPG Policy 2021.

In a letter written to the Chairman Oil & Gas Regulatory Authority, Chairman PLPGMA Farooq Iftikhar said that the Ministry of Energy under the guidance of Director General LG’s has hastily and surreptitiously drafted a LPG Policy which has not been circulated to any LPG Marketing company for their feedback or comments.

He said that this policy is different from the one that was earlier prepared by the Planning Commission, which had invited all stakeholders to provide their comments.

He said that the association has also been informed that a meeting was recently held to discuss the new Policy by inviting a select few State owned companies, while precluding both private sector LPG Producers and Marketing companies.

Iftikhar said that the Regulator is aware that the current fiscal incentives being provided to imports, by waiving off Regulatory Duty and charging a concessionary rate of 10% GST has wreaked havoc in the LPG market by the flooding of cheaper Iranian product. He said that in reality 100% of LPG imported into Pakistan which is of Iranian origin is already at least Rs.30,000 per MT cheaper than indigenous production and if anything, additional taxes and duties need to be applied to imports so as to equate its price with that of domestically produced LPG.

Chairman PLPGMA said that price has become the only parameter for sale of the product without regards to its quality or the fact that most companies have been operating at negative margins with zero incentive left to invest in safety infrastructure.

“To make matters worse, the new policy is advocating a number of measures which are not only uncompetitive in nature but will lead to further erosion of investors’ confidence.

He said that measures like any person/company shall be allowed to import LPG without having a valid OGRA License, 20% share of LPG production of State Owned Producers is to be provided to provincial Holding Companies without a fair and transparent disposal mechanism, the disparity in taxation between imported and indigenous LPG is to continue with added incentive to imports by removal of advance income tax at import stage and any vessel arriving in the country which is unable to discharge its cargo, be allowed to be re-export thus legitimizing sale of Iranian product from Pakistan, are a matter of deep concern for the stakeholders.

Chairman PLPGMA urged the Regulatory to take strict notice of the anomalies being propagated in the new policy and bulldozing of the same without developing a consensus a amongst industry and stakeholders. He also urged the OGRA to issue directions to the Ministry of Energy to formally circulate the Draft of the Proposed Policy to both Public and Private Sector LPG Producers and companies and obtain their feedback before finalizing their decision.

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