Pakistan energy crisis deepens as LPG pricing dispute sparks supply shortage warning
Islamabad, July 14
Pakistan could face a nationwide shortage of liquefied petroleum gas as importers warned that the existing pricing mechanism has made imports financially unsustainable, raising concerns over another potential energy crisis.
The LPG Importers Association of Pakistan (LPGIAP) has urged the federal government to take immediate action to prevent disruptions in fuel supplies, as reported by Dawn.
According to Dawn, LPGIAP Chairman Sheikh Mukarram Waheed wrote to Petroleum Minister Ali Pervaiz Malik, cautioning that the country's LPG distribution network could be severely affected if the issue remains unresolved.
He stated that immediate government intervention is necessary and called for an emergency meeting involving all relevant stakeholders to address growing concerns over LPG pricing.
The association argued that the LPG prices notified by the Oil and Gas Regulatory Authority (OGRA) at the end of June fail to reflect the actual cost of importing the fuel.
Importers are struggling because rising international LPG prices, increased freight charges, currency exchange fluctuations, port handling expenses, inland transportation costs, financing charges and other operational expenditures have significantly increased the landed cost of imported LPG.
The association warned that the official selling price remains below the actual import cost, forcing companies to incur substantial financial losses on every shipment.
As a result, several importers and storage facility operators have reportedly scaled back or halted their operations, citing unsustainable business conditions.
LPGIAP further cautioned that if the pricing formula is not revised urgently, additional import terminals and storage facilities may suspend operations, increasing the risk of widespread supply disruptions across Pakistan, as highlighted by Dawn.
LPGIAP said such a scenario could have serious consequences for households, commercial establishments and industries that rely heavily on LPG as a primary source of energy.
The association has appealed to the government to treat the matter as an urgent national issue and develop a transparent and realistic pricing framework that accurately reflects import costs, as reported by Dawn.
— ANI
Reader Comments
Basic economic principles here – if the government caps prices below cost, suppliers will stop importing. This isn't rocket science. Pakistan needs to either subsidize LPG properly or let market forces work. Otherwise, the poor will be left in the cold.
It's sad how our neighboring country keeps facing these preventable energy crises. LPG is essential for millions of households there. Hope the government listens to the importers and fixes the pricing formula before it's too late. 🤞
This is exactly what happens when you have regulatory capture and price controls. OGRA set the price without considering actual costs – freight, exchange rates, port charges. Now importers are bleeding money. Pakistan needs to learn from India's LPG subsidy model where we balance market pricing with direct benefit transfers.
As an Indian, I feel for the common people in Pakistan who will be affected by this. LPG is not a luxury, it's a necessity for cooking and heating. The government there should prioritize this as a national emergency and act quickly. Politics aside, civilians deserve basic energy access.
Interesting how this mirrors what happens in many developing economies – governments trying to keep prices artificially low for political reasons, but ultimately causing worse outcomes. The LPG importers are clearly stating: fix the pricing or we stop importing. Pretty straightforward.
V Vikram M