LPG shortage feared as traders threaten to stop imports

ISLAMABAD: Importers of liquefied petroleum gas (LPG) have threatened to stop imports from next month if the regulatory duty and advance tax are not withdrawn, sparking fears the country may face acute shortages at a time of peak winter demand.

The government imposed the regulatory duty on LPG imports in an attempt to match the petroleum levy slapped on domestically produced LPG but, according to the importers, the duty widened the price difference, making imports unfeasible.

Paying heed to growing calls for duty withdrawal, a meeting was held at the Petroleum Division, on the directive of Prime Minister Shahid Khaqan Abbasi, to address concerns of the importers. Producers and importers were present in the huddle.

Representatives of the importers argued that the regulatory duty of Rs4,669 per ton on imports had killed the very spirit of LPG policy designed by the present government to bridge the price gap between domestically produced and imported LPG.

They pointed out that the purpose of petroleum levy on local produce was to close the price gap with the imported commodity. But, they said, the government also levied regulatory duty on imports, which widened the price gap.

Besides the regulatory duty, the importers also demanded the withdrawal of 5.5% advance tax for ensuring a smooth supply of the imported commodity. There is no advance tax on the LPG producers.

Talking to media after the meeting, All Pakistan LPG Distributors Association Chairman Irfan Khokhar said LPG imports would be suspended from the start of February if the regulatory duty and advance tax were not taken back.

He argued that the price difference between local and imported LPG was Rs15 per kg, which gave an edge to the domestic producers. These producers, he claimed, were earning an extra Rs30 million per day from the consumers.

Khokhar alleged that the LPG producers had created a monopoly in relation to LPG quotas as out of 146 marketing companies, only 30 got the quota. In that regard, he added, officials of the Petroleum Division had agreed to conduct an investigation.

He revealed that the importers would provide a presentation to the Petroleum Division on Wednesday on the price difference with relevant evidence. LPG producers have also submitted their report and the Petroleum Division will send its assessment to the prime minister to find a solution to the issue.

Published in The Express Tribune, January 11th, 2018.

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    Original news : https://tribune.com.pk/story/1605425/2-lpg-shortage-feared-traders-threaten-stop-imports/