The Oli & Gas Regulatory Authority (OGRA) is responsible for regulating the prices of liquefied petroleum gas (LPG) in Pakistan. Today, OGRA announced a massive increase of Rs. 23.86 per KG in the prices of LPG. Hence, the old price of Rs. 177 per KG now becomes Rs. 201.15 per KG. The new prices will come into effect on 1st August 2023.
According to the new rates, the price of a 11.8KG cylinder has increased by Rs. 281.51, resulting in the new consumer price to be Rs. 2,373.64. To note, this is the maximum consumer price set by OGRA, but many areas including major cities are already selling on further margin to cover their operational expenses.
Impact on Low-Income Households
The increase in LPG prices has hit low-income households the hardest. Many households in Pakistan rely on LPG for cooking and heating, and the price hike has made it difficult for them to afford this essential commodity. The increase in the price may not seem like a lot, but due to the 6+ hours of SUI Gas load shedding, for low-income households, it becomes a significant amount.
The rise in LPG prices has also raised concerns about the potential consequences on poverty and inequality. With the increase in prices, low-income households may have to cut back on other essential expenses such as education and healthcare.
Effect on Small Businesses
Small businesses that use LPG as a fuel source have also been affected by the price hike. The increase in the commercial cylinder price has added to the already high costs of running a business. Small businesses are struggling to adapt to the increased costs and may have to cut back on other expenses such as wages and investments.
The increase in LPG prices may also have a ripple effect on the economy and employment. Small businesses are the backbone of the economy, and if they are unable to cope with the increased costs, it may lead to job losses and a slowdown in economic growth.
The Way Forward
To mitigate the impact of the price hike on consumers and the economy, the government needs to take immediate action. One solution could be to provide subsidies to low-income households to help them afford LPG. The government could also consider reducing taxes on LPG to make it more affordable for consumers and businesses.
Alternative energy sources such as solar power and biogas could also be promoted to reduce dependence on LPG. The government could provide incentives to households and businesses that switch to these alternative energy sources.
