Govt to introduce competition in LPG sector

November 04, 2026 (MLN): The government has decided to introduce competition in the LPG sector to make the commodity available to consumers at the lowest possible cost, replacing the quota-based system for locally produced LPG with a transparent auction mechanism and allowing the private sector to import.

State-owned companies, including Pakistan State Oil (PSO), the Sui gas companies and Pakistan LNG Limited (PLL), have been directed to arrange bulk LPG purchases through government-to-government and business-to-business deals.

All importers will have to disclose their monthly procurement costs, including Saudi Aramco’s contract price, premiums and freight, on their websites.

Additional revenue from the new pricing and auction mechanism will go into a Price Stabilisation Fund and a Vulnerable Protection Fund to provide subsidised LPG to deserving consumers.

The details were shared by Minister for Petroleum Ali Pervaiz Malik at a news conference in Islamabad, held jointly with Minister for Information and Broadcasting Attaullah Tarar, said a press release issued.

Ali Pervaiz Malik said the Prime Minister has directed the formulation of a comprehensive energy security framework covering storage facilities, refineries and LPG import infrastructure.

He said disruptions in supplies via the western border have added to the challenges and underlined the need to diversify import sources.

Pakistan’s annual LPG demand is about 2.4mn tonnes, while local production stands at 2,000 to 2,500 tonnes per day, with the balance met through imports.

Under the auction mechanism, companies will offer local LPG in lots of five to ten tonnes, with results made public under the supervision of the relevant authorities.

Ten percent of the quota reserved for hard areas will be distributed transparently through state-owned companies in consultation with provincial authorities.

Ali Pervaiz Malik said the landed price of imported LPG, including premiums and other costs, could range between Rs450 and Rs500 per kg, and that subsidised rates for deserving consumers under the differential fund mechanism will be set by the Prime Minister.

The Competition Commission has been directed to prevent market manipulation and cartelisation, while the Oil and Gas Regulatory Authority (OGRA) will further improve transparency in licensing and regulatory procedures.

The quality and safety of LPG cylinders and transport vehicles will be monitored through a track-and-trace mechanism.

On natural gas, Ali Pervaiz Malik said the government will make every effort to maintain supply through the pipeline network during breakfast, lunch and dinner hours, adding that additional LNG will be imported if needed and rationing could be considered if circumstances demand.

Attaullah Tarar said Prime Minister Shehbaz Sharif has placed public interest at the forefront during the ongoing crisis and that no additional burden has been allowed to fall on the people.

He said the government had passed on refineries’ profits to the public, a step he said had no precedent in the country’s history, and that all measures taken by the Prime Minister are aimed at providing relief.

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