LPG Sector Seeks 100% Increase in Allowed Profit Margin

Pakistan’s liquefied petroleum gas industry has urged the government to raise its official margin to Rs. 72,800 per metric ton amid winter shortages. In a letter addressed to the Petroleum Secretary, the LPG Industries Association of Pakistan warned that the existing Rs. 35,000 per ton rate set seven years ago is no longer viable and could trigger supply disruptions this winter. It noted that LPG marketing companies, transporters, and distributors are struggling to operate under a regulated structure that no longer reflects market realities. The Association cautioned that if margins are not revised before peak seasonal demand, the country may face shortages and a black market. Industry officials say the margin notified in February 2018 has been overtaken by sharp increases in fuel, electricity, and labour costs. According to figures shared with the government, diesel prices have climbed 191 percent, electricity tariffs 296 percent, and minimum wages 167 percent during the period. The rupee has also depreciated by 154 percent against the dollar. The Association explained that the original margin comprised Rs. 17,000 for marketing, Rs. 8,000 for transportation, and Rs. 10,000 for distributors. It said the combined cost burden has now pushed the required net margin up by 108 percent, making an upward revision essential to prevent losses, business closures, and supply-chain instability. The LPGIA has requested that the revised margin take effect from December 1, 2025, stressing that the adjustment is critical to safeguard investment and maintain uninterrupted LPG supplies, particularly in areas that depend on LPG in the absence of piped natural gas. Copies of the request have also been sent to the OGRA chairman and the Federal Minister for Petroleum. The industry says a timely response from the Petroleum Division is vital as nationwide demand continues to rise heading into winter.