Iqbal Z. Ahmed Calls for Deregulation of LPG Sector

Iqbal Z. Ahmed, the chairman of Jamshoro Joint Venture Limited (JJVL), has proposed deregulating the base-stock price of local Liquefied Petroleum Gas (LPG) or imported LPG in the proposed LPG Policy being formulated by the government, allowing market forces to determine pricing.

According to a report published by the Express Tribune, JJVL has advocated for producers and importers to have the autonomy to set prices based on market conditions, fostering fair competition, in a break from previous LPG policies. Iqbal Z. Ahmed, the JJVL Chairman, has highlighted the need for a transparent, fair, and investment-friendly policy in a letter to the director general of LG (Petroleum).

In his letter, Iqbal Z. Ahmed underscored that the only regime that had attracted investments exceeding $1 billion was the LPG Deregulation Letter of 2000. This was reversed, he noted, with the LPG Policy of 2006. Iqbal Z. Ahmed has urged the government to refrain from favoring one segment of the industry over another, stressing the importance of a policy conducive to investment.

The proposed policy, per the Express Tribune, outlines obligations for LPG producers or exploration and production (E&P) companies, indicating the field owner of a discovered LPG extraction site should have the first right to set up an extraction facility. It states that if E&P companies fail to do so within 12 months, third parties should be permitted the option under agreed terms. Iqbal Z. Ahmed wrote that producers should also have the freedom to market LPG directly or through third parties, without granting exemptions of PPRA Rules to state-owned enterprises (SOEs) for LPG imports.

Stressing that incentives for local production are essential, Iqbal Z. Ahmed proposed a 10-year tax holiday from the commercial start date, zero petroleum levy, a maximum GST of 5%, and duty-free import of production equipment. The JJVL chairman emphasized that private LPG producers should not be compelled to allocate LPG to SOEs and should have freedom of choice in distribution, while SOEs should establish transparent marketing mechanisms.

Iqbal Z. Ahmed also highlighted the importance of quality control and import regulations, advocating for preventing the import of substandard LPG and permitting only companies with valid OGRA Marketing Licenses to import LPG. Implementing these measures, wrote Iqbal Z. Ahmed, would create a transparent, competitive, and investment-friendly environment in the LPG sector, benefiting both producers and consumers.