Islamabad (Commerce Desk): Pakistan has 426 licensed marketing companies involved in LPG distribution, but more than 50 per cent of local production is controlled by just 45 companies that hold allocation quotas.
When the government attempted to abolish the quota system and distribute gas through competitive bidding, quota holders obtained stay orders from the courts.
According to sources in the Petroleum Division, most beneficiaries of LPG allocation quotas are influential individuals. A new policy is being prepared to ensure the distribution of locally produced gas through competitive bidding, while legal proceedings are also underway to get the stay orders lifted.
According to the Oil and Gas Regulatory Authority (OGRA), state-owned Oil and Gas Development Company Limited (OGDCL), Pakistan Petroleum Limited (PPL), Government Holdings (Private) Limited, PARCO, MOL Pakistan and government-owned refineries produce approximately 2,100 metric tonnes of LPG per day. More than half of this output is supplied to the 45 quota-holding companies.
Officials say the companies holding quotas also purchase locally produced LPG and sell it to marketing firms that cannot obtain gas directly from domestic production.