PM Shehbaz Declares End of LPG Mafia as Cabinet Approves New Import Policy
Prime Minister Shehbaz Sharif says the era of the LPG mafia is over, as the cabinet approves a policy that restores state-owned imports, abolishes discretionary quotas and introduces open auctions for locally produced LPG.
Prime Minister Shehbaz Sharif has declared an end to the grip of LPG intermediaries, telling a federal cabinet meeting that the groups which profited for years from the trade no longer control it. "The era of the mafia is over," he said, according to a video released by the Government of Pakistan.
Under the newly approved LPG policy, four state-owned companies will resume imports: Pakistan State Oil (PSO), Pakistan LNG, SSGC-LPG and PARCO-LPG. The firms will bring in fuel through government-to-government and business-to-business arrangements, and have already received supply offers from Saudi Arabia and Oman. The Prime Minister said imports and supply would now be handled with competition and transparency.
The policy dismantles the discretionary quota system that had benefited influential groups. Local producers will sell LPG through open auctions in lots of five to 10 tonnes, supervised by the Oil and Gas Regulatory Authority (OGRA) and the Petroleum Division, with the first auction scheduled for next week under camera monitoring. Importing companies will also be required to publish their landed costs on their websites.
Pricing is set to change as well. The base price will be tied to Saudi Aramco's monthly contract price, and OGRA will stop issuing LPG price notifications. Proceeds from the auctions will go to the national treasury, with the policy directing the funds into a subsidy pool for households eligible under the Benazir Income Support Programme.
The overhaul follows a sharp rise in open-market cylinder prices, which reached as much as Rs. 7,200, more than double OGRA's notified rate of Rs. 3,296. Officials expect that greater supply from resumed imports and local auctions should narrow the gap between the official and market rates.
The measures mark one of the most significant structural changes to Pakistan's LPG market in years, shifting the trade from discretionary allocations toward competitive and publicly monitored mechanisms.
