Import tenders of government companies to reduce LPG prices

The implementation of a competitive LPG policy has begun in Karachi, with state-owned energy companies issuing import tenders to procure gas from the global market. According to industry sources, large shipments of LPG are expected to arrive in Pakistan during November, which is likely to improve supply and lower prices during the winter season.

Sources state that state-owned energy companies have issued tenders for the import of a total of 70,000 metric tons of LPG. Furthermore, details have emerged regarding the import of 47,500 metric tons of LPG through tenders issued by Pakistan State Oil (PSO) and PARCO Pearl Gas.

LPG Expected to be Available at Rs 460 per kg

Industry sources indicate that SLL, a subsidiary of Sui Southern Gas Company (SSGC), has issued two separate tenders—for 20,000 and 50,000 metric tons—to purchase LPG from the global spot market. In addition, Pakistan State Oil (PSO), Sui Southern, and PARCO will also be importing LPG from the global market.

Based on current global rates, the cost of imported LPG upon arrival in Pakistan is estimated to be approximately Rs 450 per kg. After accounting for a modest profit margin, the gas could be made available to consumers at approximately Rs 460 per kg.

Currently, LPG is being sold in the country at prices ranging from Rs 530 to Rs 630 per kg. Consequently, the gas imported by state-owned companies is expected to be Rs 70 to Rs 130 per kg cheaper than current market prices.

Sources further note that state-owned companies have been granted the authority to determine the pricing of the imported LPG. The objective of this initiative is to enhance market competition, reduce prices, and curb black marketing, rather than to generate commercial profit.

Details of Import Tenders by PSO and PARCO

PSO has issued three tenders for the import of a total of 44,000 metric tons of LPG. The first tender, for 20,000 metric tons, was issued on November 6; the shipment is expected to arrive in Karachi between November 15 and 25.

PSO has also issued a tender for a second shipment of 20,000 metric tons of LPG, which is expected to reach Karachi between November 20 and 30. Additionally, a tender has been issued for the procurement of 4,000 metric tons of LPG on a 'spot' basis, with the deadline for bid submission set for November 16.

Meanwhile, PARCO Pearl Gas has issued a tender for the import of 3,500 metric tons of LPG. Under this arrangement, the gas will be procured from foreign suppliers for delivery to Port Qasim on a CFR (Cost and Freight) basis, with the shipment expected to arrive between November 13 and 15.

 According to industry sources, a total of 47,500 metric tons of LPG will be imported under tenders issued by PSO and PARCO Pearl Gas, with the various import shipments expected to arrive in Pakistan between November 13 and November 30.