The federal government plans to revise Pakistan’s LPG pricing formula from November 1, 2026, so that the maximum price charged by domestic producers follows Pakistan State Oil’s (PSO, the state oil marketing company) landed import cost rather than the Saudi Aramco Contract Price, according to industry stakeholders familiar with recent talks.
Federal Minister for Petroleum Ali Pervaiz Malik conveyed the proposal to industry representatives at a meeting on Tuesday. Under the draft approach, the ceiling for locally produced liquefied petroleum gas (LPG, cooking and heating fuel sold in cylinders) would be set by the cost of PSO’s imported cargo after it arrives in Pakistan.
How the proposed LPG pricing formula would work
Today’s producer ceiling is linked to Saudi Aramco’s contract price. The new LPG pricing formula would replace that benchmark with PSO’s landed import cost for the same fuel.
Locally produced LPG makes up roughly 35% of Pakistan’s supply; imports meet the remaining 65%. Industry representatives estimate the shift could let domestic producers raise prices by as much as 40%, which they say may push retail cylinder prices higher by about 20–25%.
Industry concerns on legality and competition
At the meeting, stakeholders questioned whether the mechanism would be lawful and how it would affect competition and household buyers. They argued that pegging domestic prices to one state-owned importer’s costs could increase volatility if PSO cargoes are bought at higher rates.
Participants also asked how the benchmark would treat private importers who can sometimes buy LPG below PSO’s landed cost. Industry representatives instead pressed for full deregulation, so buyers and sellers set prices through market negotiation.
They further raised the risk of over-invoicing on imported LPG, pointing to earlier allegations linked to imports by Sui Southern Gas Company (SSGC, a major gas utility).
What happens next
The proposed change has not been formally confirmed by the petroleum minister, who was unavailable for comment when approached. Until an official notification is issued, the existing Saudi Aramco-linked ceiling remains the reference described by industry participants, and the November 1 timeline should be treated as a plan under discussion rather than a settled rule.
Aasan alfaaz mein
Sarkar November 1, 2026 se LPG ki pricing formula badalne ka irada rakhti hai. Local producers ki maximum qeemat ab PSO ke import cost se bandhi ja sakti hai. Industry ke mutabiq retail LPG lagbhag 20 se 25 percent mehnga ho sakta hai. Yeh tabdeeli abhi minister ki taraf se rasmi taur par confirm nahi hui.
