LPG dealers demand anti-dumping duty on imported LPG

F.P. Report

KARACHI: Pakistan LPG Marketers Association has urged the government to impose anti-dumping duty on LPG Imported through Taftan to protect LPG produced locally.

While addressing a meeting of Pakistan LPG Marketers Association, Farooq Iftikhar said that local

LPG industry must be protected through imposition of anti-dumping duty on out-of-control imports of LPG through land as it is undermining the energy security of Pakistan.

 He said that  presently all LPG coming through sea is of Iranian origin and only documents with changed origin are made at Dubai to facilitate import to  Pakistan by Sea, whereas LPG coming through land is shown as of Iranian origin to avail special duty and sales tax structure. He said that there is no concept of price calculation based on Saudi Aramco CP in Iran. He said that LPG

is being auctioned by Refineries in Iran is at substantially low price. He said, to sell LPG from Iran special price offered ex Taftan to exporters is CP-150 USD enabling them to export & placing substantial cushion in the hands of Exporters to the detriment of Pakistani produced LPG.

Presently, it’s all Hunky-Dory  for Distributors of LPG who are selling to consumers at Rs 100/- per kg despite the facts that LPG Marketing Companies are supplying local imported LPG @ Rs. 75/- per Kg as manipulated by distributors and importers mafia.

He said the local LPG costs Marketing Companies Rs 92,000/- per ton at their plants as the local Product is levied with 17%  plus 3 percent General Sales Tax (GST) along with Petroleum Development Levy (PDL) of Rs. 4669/MT. The marketing companies also incur substantial operational expenses, whereas   imported LPG costs only 250-275 US$ per ton approx. Further, they pay only 10 percent sales tax and zero regulatory duty,” Iftikhar said.

Stocks of local LPG with producers and Marketing Companies continue to pile up because of Substantial differential, forcing them to revise prices every two to three days.

Another serious contributor to stocks continuous piling, is the high local producer price announced by OGRA without considering ground realities. OGRA needs to seriously revise its pricing formula and must consult marketing companies and producers before announcing price. The LPG pricing committee formed by Ministry of Petroleum & Natural Resources hardly meets, so the result.  OGRA must immediately delink with Saudi Aramco contract price and instead link it with spot price of Iranian.

“Excessive imports of LPG through Taftan is not only affecting sale of local LPG but is also creating severe environmental and health issues amongst the low income Citizens. The Ministry of Petroleum and the Ministry of Finance should take serious notice of continuous misuse and wastage of valuable foreign exchange, evasion of taxes, besides transfer of billions of Rupees  through Hundi. LPG imports from Iran through land route are extremely disturbing for the local producers as they are heavily discounting their price of LPG, being country under of sanctions United Nations, and need US Dollars to sustain their economy.

Ghee, Steel Industries to excel by government decision: Islamabad Chamber of Commerce and Industry has welcomed the Federal government decision for putting Ghee and Steel Industry in negative list in FATA and Provincially Administered Tribal Areas (PATA)tax relief for giving them tax relief.

President, Islamabad Chamber of Commerce and Industry Ahmed Hasan Moughal has said that decision would encourage these sectors and incentives were causing huge loss to FBR in taxes as steel and ghee industries were shifting from tax area to non-tax area and there was un-healthier competition in the market.

He said labor was shifting from Punjab to KP and federal taxes on steel had reduced by 50% due to shift of steel units from all parts of the country to FATA/PATA which was an alarming situation.

He said that sales tax exemption to FATA/ PATA was creating revenue problem to FBR as this tax wasa consumer tax and buyer has to pay it. He said industry has to collect this tax from consumer.