The current temporary government has put together a plan for using LPG (liquefied petroleum gas) in 2024.
The plan suggests removing regulations on LPG pricing and offers a 10-year tax break for new LPG production. Additionally, it proposes no petroleum levy and a reduced GST (Goods and Services Tax) of 5 percent instead of 18 percent.
In this plan, the role of the Petroleum Division will focus on making policies, while Ogra (Oil and Gas Regulatory Authority) will take a more effective role in regulation and necessary actions, following the policy and Ogra Ordinance. An “Appellate Tribunal” will also be established to allow concerned parties to challenge the actions and decisions of the regulator.
The Energy Ministry official mentioned, “We have shared the plan with gas exploration and production companies, the Federal Board of Revenue (FBR), refineries, and private players for their feedback. The plan, with input from these stakeholders, will be presented to the CCI (Council of Common Interests).” A meeting with representatives from five local refineries was organized to discuss the LPG policy draft, and the refining industry highlighted some concerns. They were encouraged to provide collective feedback on the draft.
The Sindh Investment Facilitation Company (SIFC) has given approval to the proposed plan but suggested further adjustments based on justified input from stakeholders before presenting it to the CCI for approval. The government’s plan aims to increase the supply of low-cost imported LPG by suggesting zero advance income tax (instead of 5.5%) and reducing GST from 10% to 5%, gradually decreasing to 0% annually. To make State-Owned Enterprises (SOEs) more competitive, they may receive partial exemption from PPRA Rules, 2004. This comprehensive approach seeks to create a favorable environment for LPG usage and production in the country.