Pakistan’s distributors and shop owners are now selling liquefied petroleum gas (LPG) at twice the rate fixed by the government, resulting in a huge difference of Rs291 per kg that enforcement agencies have not been able to bridge yet.
Consumers of LPG in Pakistan are having to pay almost double of the actual amount because the vendors in the open market do not adhere to the rates fixed by the government. The cost of LPG in the open market in Pakistan is ranging from Rs550 to Rs600 per kilogram whereas the actual price of LPG is set at Rs308.76 per kg.
How Pakistan’s LPG open market price difference came about
Pakistan’s open market LPG price difference is not because of lack of regulation but due to failure of price enforcement by the government. While the price set officially is Rs308.76 per kilogram, LPG dealers and retailers are free to set their own price which is anywhere between Rs550 and Rs600 per kilogram. Such a difference, which could be up to Rs291 per kilogram, adds to the cost burden of households on a monthly basis.
Consumers want regulation, not price fixing
There has been a lot of outcry from the citizens of Pakistan regarding the problem of LPG prices on the open market. Most of them feel that the prices are too high for their budget, which makes it difficult to handle everyday expenditure. The problem is not with the price itself but with the lack of a regulation mechanism for the same price.
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The citizens in particular have questioned the need for the officials to oversee and regulate the prices in terms of their distribution and sale. It has been demanded by the citizens that the government needs to take measures and immediately stop the practice of charging excess fees. The citizens have demanded from the government to take strict actions against hoarding and profiteering.
Why the enforcement gap remains open
The failure of LPG price enforcement in Pakistan is reflective of a larger structural problem inherent in each of the regulated goods markets in the country, wherein while determining a price requires a mere notification, its enforcement requires much effort and is a task which has eluded regulatory bodies time and again. Without this, the difference between official price and the market price continues to increase rather than decrease.
In order for there to be a closure of the price gap of LPG in Pakistan open market prices, the approach must go beyond mere threats. There has to be effective monitoring of prices at the retail level, imposition of penalties for price violation on distributors, and mechanisms for making reports. The fact that sellers flout the set prices publicly shows that there is an existing system that cannot implement its objectives due to lack of capability.
Nayab Fatima is a university graduate and an emerging media professional with a strong passion for journalism, research, and independent reporting. She specializes in developing well-researched, fact-based, and analytical news stories covering a wide range of sectors, with particular expertise in technology, telecommunications, aviation, and the automobile industry.
