ISLAMABAD (The Thursday Times) — Pakistan is preparing to move LPG to market-based pricing, with import costs setting the price and subsidies kept for low-income households, under proposals sent to the federal cabinet for final approval.
The plan would end monthly price notifications by the Oil and Gas Regulatory Authority for both local and imported LPG, with November 1, 2026 proposed as the start date. State-owned companies including Pakistan State Oil, SSGC LPG and PARCO Pearl Gas would lead bulk imports and set monthly base prices tied to the actual landed cost, covering the Saudi Aramco contract price, import premiums, freight, insurance and taxes.
The Petroleum Division says the current formula no longer reflects what imported LPG costs. Its fixed margin of Rs35,000 per tonne has not changed since 2018, and market prices have run well above the official ceiling as a result. Average prices at filling plants were reportedly Rs60 to Rs79 per kilogram above the notified consumer price between January and July 2026, with the gap reaching Rs158 in March.
A new fund in the Public Account would collect the difference between the import-based price and the lower price paid to local producers. That money would pay for targeted subsidies for households that meet Benazir Income Support Programme or poverty-test criteria. The Petroleum Division would draw up the rules within a month with the Finance Ministry and BISP, and the Auditor General would audit the fund.
Companies would set their own marketing margins and freight costs, with the Competition Commission and OGRA responsible for stopping collusion. The LPG Pricing Committee set up in 2017 would be wound up, and existing taxes and levies would still apply.
