LPG supply and distribution infrastructure attract Rs3.72bn investment in 9 months

KARACHI: The liquid petroleum gas (LPG) supply and distribution infrastructure attracted an investment of Rs3.72 billion during July-March 2019-20, as LPG marketing companies are undertaking expansion, Economic Survey of Pakistan noted.

LPG plays an important role in the energy mix of Pakistan as it provides a cleaner alternative to biomass-based sources, especially in locations where natural gas is not available.

The total supply of LPG during July-March 2019-20 was 739,785 Metric Ton. Currently, there are 11 LPG producers and 200 LPG marketing companies operating in the country having more than 7,000 authorized LPG distributors.

According to the Economic Survey, around 76 percent of the LPG consumed is met with local production, whereas the rest is imported. Refineries, gas producing fields and imports are three main sources of LPG supply in the country.

LPG is gradually becoming popular domestic fuel among people who live in far-flung areas and where natural gas infrastructure does not exist.

Currently, LPG accounts for about 1.2 percent of the total primary energy supply in the country. This low share of LPG in the total energy mix is mainly due to supply constraints and the higher price of LPG in relation to competing fuels like natural gas, wood etc.

The current size of LPG market is around 1,061,447 MT/Annum. It is primarily meant to supply for the domestic fuel requirement especially in natural gas starved areas and in peak times in the urban territories. The use of LPG as domestic fuel shall deter deforestation in hilly areas and shall provide a comparatively healthier and hygienically safe alternative to the common citizens. GoP has taken a policy decision to allow use of LPG in the automotive sector to share the burden with conventional auto fuels. Subsequently, OGRA has laid down an elaborated regulatory framework for supply of LPG to the vehicles.

From 2008 onwards, OGRA started registration of LPG equipment manufacturing companies for the purpose to eradicate substandard manufacturing, sale and use of LPG equipments. Till March 2020, OGRA has pre-qualified 52 LPG equipment manufacturing companies as authorized manufacturer of LPG equipment.

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