Pakistan Shifts LPG Pricing Power From OGRA to PSO and SSGC LPG Under New Deregulation Plan

Pakistan has transferred the task of setting liquefied petroleum gas (LPG) prices from the Oil and Gas Regulatory Authority (OGRA) to two state-owned companies, Pakistan State Oil (PSO) and Sui Southern Gas Pipelines Limited, under a broader overhaul of the LPG sector approved by the federal cabinet. Following directives from Prime Minister Shehbaz Sharif, Petroleum Minister Ali Pervaiz Malik assigned both companies full responsibility for determining LPG cylinder prices nationwide, ending OGRA's long-standing role in the monthly pricing process.

The shift is part of a move toward a deregulated pricing system in which import-parity based rates set by state-owned companies replace OGRA's regular price notifications. Under the reforms, PSO, Pakistan LNG Limited, SSGC LPG and PARCO Pearl Gas will re-enter the import market to strengthen competition and improve supply security. Orders for imported LPG cargoes have already been placed, with vessels expected to reach Pakistan next week.

The government expects the additional supplies, combined with the new pricing arrangement, to bring LPG prices down significantly across the country. To support access for lower-income households, a dedicated fund is planned to subsidise LPG at an estimated Rs. 300 to Rs. 350 per kilogram for families eligible under the Benazir Income Support Programme (BISP).

The framework also sets rules for domestic producers. Indigenous LPG producers will allocate 10 percent of their output to state-owned companies for distribution in remote and underserved areas, while the remaining 90 percent will be sold through transparent monthly auctions. Officials say the auction mechanism is intended to make pricing more predictable and reduce room for market manipulation.

Alongside the pricing changes, the plan includes tighter quality testing, restrictions on unlicensed LPG filling and transportation, stronger safety standards, and enforcement action against cartelisation and undocumented imports. The measures are aimed at formalising a market where safety incidents and price volatility have been recurring concerns for consumers and regulators alike.

The decision marks one of the more significant structural changes in Pakistan's energy retail landscape in recent years, shifting pricing responsibility from a regulator to commercial state entities. How quickly the expected price relief reaches consumers will depend on the timing of incoming cargoes, auction outcomes and the rollout of the BISP subsidy mechanism.