Research Analyst
Sep 27 - Oct 3, 2010

Liquefied Petroleum Gas (LPG) has played a valuable role in meeting the world's energy needs. In the future, LPG has the opportunity to enhance this role by also helping to combat climate change. By releasing fewer harmful pollutants when used as a domestic and automotive fuel source, LPG is not only a cleaner alternative but also a healthy one. LPG can be transported, stored, and used virtually anywhere in the world. It does not require a fixed network and will not deteriorate over time.

LPG is very clean burning and has lower greenhouse gas emissions than any other fossil fuel when measured on a total fuel cycle. It is also nontoxic and does not contaminate soil or aquifers in the event of leakage. LPG can be accessible to everyone everywhere today without major infrastructure investment.


Domestic 46.7
Chemicals 26.8
Refinery 50
Transport 8.7
Industry 11.3
Agriculture 1.5

LPG is cost-effective, since a high proportion of its energy content is converted into heat. LPG can be up to five times more efficient than traditional fuels, resulting in less energy wastage and better use of the planet's resources. LPG is a multipurpose energy. There are more than a thousand applications, from cooking, heating, air conditioning and transportation, to cigarette lighters and even the Olympic torch.

Currently, in Pakistan LPG contributes about 0.7 per cent of the country's total energy supply mix. The main objective to enhance the use of LPG is to stop deforestation in the areas where the supply of natural gas is technically not viable. As a result of government's investor friendly policies, LPG supplies have gradually increased. The cornerstone of LPG Policy is to ensure enhanced availability of LPG at a competitive price to the end consumer. LPG marketing companies have imported around 62,920.3 MT of LPG during July-March 2009-10.

During 2008-09, Pakistan's final energy consumption of about 37.3 million tons of oil equivalent are met by mix of gas, oil, electricity, coal and LPG sources with the different levels of shares. The share of gas consumption stood at 43.7 per cent in total energy mix of the country during 2008-09 followed by oil 29.0 per cent, electricity 15.3 per cent, coal 10.4 per cent and LPG 1.5 per cent.

During the last ten years (1999-2000 to 2008-09), the consumption of petroleum products has increased by an average rate of 0.5 per cent per annum. The consumption of gas, electricity, and coal has increased at an average rate of 6.8 per cent, five per cent and 12.5 per cent per annum. This long-term trend suggests that composition of annual energy consumption is shifting from petroleum products to other energy sources.

Due to revival in the macroeconomic activity, the energy consumption in petroleum products, gas and coal has witnessed growth rates of 8.1 per cent, three per cent and 10 per cent respectively during July-March 2009-10 over the corresponding period last year.


Electricity 15.3
Oil 29
Gas 43.7
LPG 1.5
Coal 10.4

Moreover, the prices of LPG are stable in the market despite an increase of Rs9,360 per ton in its price by a local producer OGDC. However, the dependency on the imported LPG has been increased after a decline in its local production by 700 to 800 tons per day. In the country, some vested interests and profiteers arbitrarily increase LPG price to earn a unjust profits. LPG is presently being sold in the range of Rs80 to 82 per kg in Karachi, 11.8 kg cylinder at Rs945 while 45.4 kg cylinder at Rs 3677. The retail price of LPG in Punjab is Rs95 per kg while 11.8 kilo cylinder at Rs1,121 and 45.4 cylinder is available at Rs4,313. In Khyber-Pakhtunkhwa and Swat, LPG is also being sold at Rs100 to 105 per kilo, 11.8 kg cylinder at Rs1,210 and 45.4 kg cylinder at Rs4,654. Recently, the price of domestic cylinder has been increased by Rs30 while the rise in commercial cylinder price was Rs120. In Lahore, new domestic cylinder's price stands at Rs906, in Karachi Rs870, in Peshawar Rs953, while in Gilgit and Murree cylinders are sold at Rs953.

LPG Distributors Association has alleged that LPG marketing companies are not following the directives of the Ogra regarding prices, and have refused to supply the product to dealers. Ogra determined maximum LPG consumer price and directed the marketing companies to follow the new price mechanism. However, LPG marketing companies are violating the directives of Ogra and have refused to give the product to the dealers at the price determined by the authority. LPG companies had earned massive profits by raising prices manifold during the month of Ramazan.


In the world hundreds of millions of people currently use LPG and depend on it for thousands of applications, in commercial business, in industry, transportation, and farming.