Ministry of Petroleum and Natural Resources Liquefied Petroleum Gas (LPG) Policy 2016 Presentation to the Council of Common Interest 29-Feb-2016

Background Liquefied Petroleum Gas (LPG) is a colourless, odourless and environment friendly mixture of hydrocarbons (mainly propane and butane) which is gaseous at normal temperature and pressure, and liquefiable under moderate pressure. A chemical ethyl mercaptan is added to impart a pungent odour for leak detection. Currently ~1,964 tons/day LPG is being produced domestically having around 1% share in primary energy supply mix.

Background  Prior to September 2000, MPNR was regulating LPG business under LPG (P&D) Rules,  In June 2000, Cabinet decided to deregulate the LPG business.  LPG (P&D) Rules, 2001 were promulgated to incorporate Cabinet decision  Regulatory functions along with LPG (P&D) Rules, 2001 transferred to OGRA w.e.f. 15-Mar-2003.

Background  Role of MPNR is confined to policy formulation  1 st LPG (P&D) Policy May-2006  2 nd LPG (P&D) Policy Aug-2011  LPG Policy Guidelines Jan-2013

Industry at a glance No. of LPG Producers12 Avg. Indigenous LPG production1,390 MT/day No. of LPG Marketing Companies~92 No. of LPG Distributors~4,500 Combined LPG Storage~22,500 MT Estimated Demand~2,500MT/day No of bottling facilities125

Industry at a glance 6 LPG import terminals02 Avg. LPG Imports (marine)68,620 MT (188 MT/day ) Import through land Figs not available Import Terminal Storage Capacity (MT) Throughput Capacity ( MT/annum) EVTL4,500100,000 SSGC LPG6,750500,000 TOTAL11,250600,000

LPG Production (Dec-1015) E&P CompaniesMT/day% Public36818 Private68635 Refineries Public44623 Private1105 JJVL35418 Total1,964

Proposed LPG Price - Regulated  OGRA will regulate and notify the pricing at all levels of supply chain.  Initially, consumer price will be fixed at Rs 895 per Cylinder.  Petroleum Levy as provided in Petroleum Levy Ordinance 1961 may be charged, as specified from time to time.  To gasify far flung and hilly areas, Gas companies as well as third parties will be allowed to operate LPG Air Mix Plant.  Locally produced LPG will not be allowed for use in vehicles and industrial purposes. However, LPG Refueling Stations as well as industry can use imported LPG.  OGRA will suitably amend the LPG Production and Distribution Rules 2001 to regulate the LPG prices and its usage in designated sectors.

Proposed LPG Price - Regulated Rs/MTRs/Cylinder Producers’ Price (including excise duty)41, Marketing/Distribution margin24, Consumer Price (Ex-GST)65, % GST11, Final LPG Consumer Price76,050895

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