Feb 18, 2015

Government Pakistan should implement strategy for reducing local LPG price

To take prompt action to examine disturbance of market with important poisonous material in the form of LPG at lower rate. The liquefied Petroleum Gas Association of Pakistan has requested to government of Pakistan to provide strategy for reducing price of LPG.
It is observed in the market of local LPC per ton price has been recorded recently for Rs 80000, market rates for imported LPG has been recorded between the range of Rs 68000 to Rs 69000.

I would say that this reducing price strategy for local LPG will help government of Pakistan in generating revenue within economy and saving foreign exchange. If we reduce prices of local LPG more sales will be generated and due to enhancement in sales more revenue will be generated. Through this revenue LPG sector will gain growth to expand their production strategy to cover market demand, so then there will be no need to buy LPG from external sources. Even though LPG association also pointing out the dropping of tax revenue in fuel sector and Federal Board of Revenue has to be investigate the ground realities.

Once prices of local LPG reduced, marketers will prefer to buy local LPC instead of imported. I thought that if government of Pakistan takes initiative for reducing prices of local LPG the sales will be increased and this action will drop the sales of imported LPG which is available in market at lower prices.

It is also very important to think about tax revenue and reserves in government reverse. If I say that if government imposes the taxes on LPG, even then the revenue target will not be achievable the reasons could be corruption in tax collection or spend the foreign exchange to buy imported LPG. I thought both reasons are very valid in this case, government should instruct FBR to check the matter from deep inside. Due to buying imported LPG availability in market, local LPG suppliers are facing hurdles in terms of business losses.

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