LPG price slashed by Rs11.6/kg for Jan 2023

After a decrease in the prices of Propane and Butane by Saudi Aramco, the government on Friday also slashed the prices of Liquefied Petroleum Gas (LPG) by Rs11.60 per kilogram for domestic and commercial consumers for January 2023.
According to notification issued by Ogra, the price of LPG for January 2023 has been reduced by Rs11.60/kg and it will decrease the price of a domestic 11.8kg cylinder by Rs136.86 from Rs2,548.29 in December 2022 to Rs2,411.43 in January 2023, while the price of commercial cylinder(45.4kg) would reduce by Rs527 and now be sold at Rs9,278 in January 2023 against the price of Rs9,804 in December 2022.

After the decrease of nearly Rs11,60/kg a kilogram of LPG will be available at Rs204.4/kg in January against the price of Rs216/kg in December. LPG is being used for cooking purposes in areas where piped natural gas is not available.

It is worth mentioning here that Saudi Aramco (Saudi Arabian Oil Company) has reduced its propane contract prices for January by $60 month-on-month (MoM) to $590/metric ton. The company also decreased butane contract prices for next month by $45 MoM to $605/MT. In December Propane and Butane contract price was $650/tonne each. In Pakistan, LPG applicable prices are calculated on a 40:60 ratio of Propane to Butane.

As per the Ogra calculation, the producers’ price of LPG (propane 40 percent and butane 60 percent) has been determined at 134,996.39/ton. This price included excise duty of Rs85/ton, while excluding the petroleum levy. Under this head, the producer price of Rs1592.96/11.8kg cylinder has been worked out. Marketing/distribuion margin has been set at Rs35,000 per ton(Marketing Margin Rs17,000/M Ton+ Distribution Margin 10000/M Ton+ transportation Rs8000/M.Ton) or Rs413 per cylinder, a petroleum levy of Rs4,669 per ton would also be charged, which would translate into Rs55.09 per cylinder. Prior to the imposition of general sales tax, the consumer price would be Rs139,665.36/ton, while the price of the 11.8kg cylinder is Rs1648.05 per cylinder. Additionally, a GST of 17 percent on Rs139,665.36/ton would be Rs23,743.12/ton or Rs280.17 for a 11.8 Kg cylinder. The maximum producer price with GST would be Rs163.408.51/ton or Rs1928.22 per cylinder.

Interestingly, the poor LPG consumers will pay another GST of Rs5950/ton at 17pc (Rs70.21 per 11.8 kg cylinder) on Marketing/distribution margin of Rs35,000 per ton, taking the maximum consumer price to Rs204,358.51/ton or Rs2411.43 per 11.8 kg cylinder.

It is also to mention that for the month of December Ogra had increased the price of a domestic cylinder by Rs139 while the price of a commercial cylinder was increased by Rs535.

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