PM Shehbaz rejects LPG auction plans for liquefied petroleum gas produced by state-owned companies, insisting that a comprehensive policy and legal framework must be ready before any such process moves forward.
The prime minister also declined interim measures put forward by the Petroleum Division. Because of that decision, bidding results from simultaneous auctions held on August 10 by three major public-sector LPG producers will not proceed.
Why the auction plan was stopped
Officials had expected the proposed auctions to push LPG prices up by at least 15 percent. That rise was put at about Rs77,000 per tonne, or roughly Rs900 on a standard 11.8-kilogram household cylinder.
The design would have tied the producer price of locally made LPG to import parity and widened margins for marketing companies and distributors. Existing quota arrangements were to give way, on a pilot basis, to standardized lots of five tonnes a day from Oil and Gas Development Company Limited, Pakistan Petroleum Limited, Pak-Arab Refinery Company, and Government Holdings (Private) Limited.
Stakeholders already in the LPG trade have challenged the idea in legal forums, arguing that current policies and rules do not allow this kind of sale. The Petroleum Division and the public-sector producers have discussed the litigation with the Attorney General for Pakistan.
Prices and supply pressure on households
The decision lands while many households already pay far above the regulated ceiling. An 11.8kg cylinder is selling for around Rs5,000 in the market, against the Oil and Gas Regulatory Authority (OGRA)—Pakistan’s oil and gas price regulator—notified maximum of Rs3,296.
Industry officials say part of the squeeze comes from limited inflows through the Taftan border and from delays in clearing more than 25,000 tonnes of LPG stuck at Rahimdan, near Gwadar. They report that waits at the Gwadar terminal have stretched to about a month, lifting freight costs from about $100 to $400 per tonne.
Imports have also been hit by the closure of the Strait of Hormuz, leaving Oman as a main alternative route. At the Petroleum Division’s request, the Foreign Office approached Oman’s state-owned OQ Trading for cargoes. Sources later said the volumes on offer were committed to a single private buyer. Sources also said both LPG terminals at Port Qasim were already full, which raises questions about how severe the shortage is and how tightly the market is being watched.
What happens next for Shehbaz Sharif LPG policy
For now, the Shehbaz Sharif LPG policy signal is clear: no auction path for state-owned companies’ output until the legal and policy base is built. Pakistan’s overall LPG demand is about 1.4 million to 2 million tonnes a year, and more than half of that usually comes from imports, so local producer sales remain only one part of a wider supply picture.
Any fresh attempt to change how state producers sell LPG would need clearer rules, and likely a response to the court challenges already under way. Households, meanwhile, will continue to watch market cylinder rates and OGRA’s notified maximum as the main day-to-day price signals.
Aasan alfaaz mein
Wazir-e-Azam Shehbaz Sharif ne sarkari companies ki LPG nelaami ka plan mana kar diya hai. Unhone kaha pehle poori policy aur qanooni framework hona zaroori hai. Agar nelaami hoti to gharailu cylinder lagbhag 900 rupay mehnga ho sakta tha. Ab August ki boliyan aage nahi barhengi, lekin market mein cylinder ab bhi mehnga hai.
