PM Shehbaz Sharif Rejects LPG Auction Without Legal Framework

ISLAMABAD: Prime Minister Shehbaz Sharif has firmly rejected a proposal from the Petroleum Division to auction liquefied petroleum gas (LPG) produced by state-owned entities (SOEs) due to the absence of a comprehensive legal and policy framework. The prime minister emphasized that any transaction should be supported by a robust regulatory structure to prevent unnecessary controversies, according to an official statement.

PM Shehbaz’s decision comes in light of concerns regarding the potential implications of the auction, which was set to take place following simultaneous bidding by three major public sector LPG producers on August 10. The prime minister declined to approve any interim measures, effectively halting the auction process. This decision is expected to prevent a significant increase in LPG prices, which were projected to rise by at least 15 percent, exacerbating the already high winter prices.

The proposed auction would have linked the producer price of locally produced LPG to import parity, thereby increasing the margins for marketing companies and distributors. If approved, the bidding results would have resulted in an estimated net impact of Rs77,000 per tonne, translating to an additional Rs900 for a domestic cylinder of 11.8 kg, further straining household budgets.

Looking ahead, the government is expected to engage in discussions to formulate a comprehensive policy and legal framework for the LPG sector. This initiative aims to ensure that future transactions are conducted transparently and equitably, safeguarding consumer interests and stabilizing the energy market.