The open-market price of a 12-kg LPG cylinder in Pakistan has jumped 56% to PKR 7,000 following the closure of two crossings with Iran on October 17
Rising fuel costs have reduced the earnings of LPG-powered rickshaw drivers in Lahore, with some families cutting their food consumption to two meals a day
The government plans bulk LPG purchases, competitive auctions and subsidy mechanisms to address supply disruptions and protect vulnerable consumers
A sharp rise in liquefied petroleum gas (LPG) prices in Pakistan has cut the earnings of rickshaw drivers and forced some low-income families to reduce their meals, as supply disruptions following the closure of key crossings with Iran continue to affect the market.
In Lahore, 33-year-old rickshaw driver Rashid Ali told Reuters that his daily earnings, which previously averaged around $6.50, had fallen to about $3. His family has cut its food consumption to two meals a day as he struggles to cover household expenses. Ali has driven an LPG-powered rickshaw for 13 years and said he now spends much of the day on the road without making enough to meet his family's basic needs.
Traders told Reuters that the price of a 12-kg LPG cylinder had risen by 56% within days of the border closures to PKR 7,000, equivalent to about PKR 583 per kg. Before the disruption, the cylinder was selling for around PKR 4,500. The Pakistan LPG Association said the country had been importing approximately 7,000 tonnes of LPG daily from Iran before the crossings were closed.
The increase in market prices is significantly higher than the rate in the latest notification issued by Pakistan's Oil and Gas Regulatory Authority (OGRA). Its November notification put the price of indigenous LPG at PKR 294.08 per kg, or PKR 3,470.09 for an 11.8-kg domestic cylinder, compared with PKR 3,296.23 in October. The notified price applies to domestically produced LPG, while the higher figure reflects open-market prices amid the import disruption.
The crossings at Gabd-Rimdan and Taftan were closed on October 17, halting LPG imports from Iran, traders said. Pakistan's Balochistan government cited security concerns and smuggling, while Iran initially referred to technical issues. The disruption has exposed the importance of imports to Pakistan's domestic supply, particularly as winter approaches.
Government response
Petroleum Minister Ali Pervaiz Malik said on Tuesday that Pakistan's annual LPG demand was approximately 2.4 million tonnes, while domestic production stood at around 2,000–2,500 tonnes a day. The remaining requirement is met through imports, including supplies received through the western border and sea routes.
The government has directed state-owned companies, including Pakistan State Oil, the Sui gas companies and Pakistan LNG Limited, to arrange bulk LPG purchases through government-to-government and business-to-business agreements. Private importers will also be encouraged to increase supplies.
Malik said the existing quota-based system for distributing locally produced LPG would be replaced with competitive auctions in lots of five to 10 tonnes, with the results made public. Importing companies will also be required to disclose monthly procurement costs, including Saudi Aramco's contract price, premiums and freight charges.
The government plans to channel additional revenue from the new pricing and auction system into a Price Stabilisation Fund and a Vulnerable Protection Fund to subsidise LPG for eligible consumers. The Competition Commission has also been directed to prevent market manipulation and the formation of cartels.
The measures address both supply and distribution, but the immediate challenge remains securing sufficient imports and bringing down prices for households and workers who depend on LPG.
