ISLAMABAD: Pakistan has introduced a competitive auction mechanism for allocating locally produced liquefied petroleum gas (LPG), with 90% of domestic output to be offered to companies through transparent bidding.
Under the new arrangement, the remaining 10% of indigenous LPG production will be supplied to state-owned marketing companies to ensure availability in remote, hilly and hard-to-reach areas. The decision was discussed at the first meeting of the LPG Committee on Saturday, chaired by the Petroleum Division secretary, following approval of the deregulated framework by the federal cabinet on November 4.
The committee also decided that each participating company would be allowed to secure a maximum allocation of 20 metric tons of LPG per day to provide eligible bidders with equal opportunities.
Federal Petroleum Minister Ali Pervaiz Malik said the revised mechanism was intended to address concerns over LPG shortages, unequal distribution and high prices faced by consumers. He said the competitive bidding process would improve transparency, encourage wider market participation and strengthen the domestic LPG supply chain.
To monitor the availability of the commodity, the committee decided to track daily LPG production and submit regular production figures to the prime minister for review. The committee includes representatives from the Oil and Gas Regulatory Authority (OGRA), Oil and Gas Development Company Limited (OGDCL), Pakistan State Oil (PSO), United Energy Pakistan Limited and the Petroleum Division.
The new framework is aimed at replacing the existing quota-based allocation system with competitive auctions and improving access to locally produced LPG across the country.
