Prime Minister Shehbaz Sharif has formed an eight-member ministerial committee to review proposed reforms for liquefied petroleum gas (LPG) in Pakistan, after dealers and marketing companies protested that the new framework was being prepared without proper consultation with the industry. The committee has been given one month to examine the package and report back to the prime minister.

The move comes at a difficult moment for households. Market prices for a standard domestic cylinder have been reported at between Rs6,000 and Rs7,200, well above the Oil and Gas Regulatory Authority's official benchmark of Rs3,296 for an 11.57kg cylinder. Per-kilogram prices in several areas have also been reported at Rs500 to Rs600, against the regulator's October rate of Rs279.34. Supply pressures, including disrupted trade at the Iranian border and reduced sea shipments, have been cited in reporting on the gap between the notified price and what many buyers actually pay.

What the committee must review

Under the draft proposals reported by Dawn, state-owned enterprises including PSO, the Sui companies, PARCO and Pakistan LNG would enter the LPG import market, with monthly pricing worked out on an import-parity basis linked to Saudi Aramco rates and actual import costs. The regulator would stop issuing monthly LPG price notifications, while margins for marketing and importing firms would rise from Rs35,000 to at least Rs50,000 per tonne as an adjustment for inflation. The committee must also look at cylinder standards, action against illegal cylinder sales, and a proposed local LPG model.

What happens next

For now, no new price system has taken effect. Households and small businesses that depend on LPG for cooking and heating will be watching whether the review narrows the gap between official rates and shop prices.