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AGP Audit Exposes Monopoly Of 20 Companies In LPG Sector

The Auditor General of Pakistan (AGP) has revealed a monopoly of 15 to 20 companies in the LPG sector.

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Documents available with ProPakistani stated that during a performance audit of LPG producing companies for the fiscal year 2015-19, it was observed that the Oil and Gas Regulatory Authority (OGRA) as the regulator had granted 194 LPG marketing and distribution licenses up till September 2019. The vast majority of these licenses failed to implement their submitted work program, but the authority did not have any monitoring system to review the same and cancel the redundant license.


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As per the LPG policy 2016, OGRA shall issue provisional licenses for an initial period of two years for LPG marketing to technically, and financially sound applications for construction works to be commensurate with their work program.

The work program will ensure that adequate storage, cylinders, and logistics infrastructure is constructed within this time frame in line with the marketing plan of the company.

The provisional license will be converted into a marketing license for a period of fifteen years on the completion of works to the satisfaction of OGRA.

An audit revealed that the end-user had no option to purchase LPG at exorbitant rates from 15-20 companies that have a monopoly in the sector.

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The Audit is of the view that weak security by the management resulted in the grant of license to companies, which was not technically and financially sound and hence unjustified. Furthermore, the absence of any mechanism regarding company-wise sale reflects poorly on the performance of OGRA as a regulator.


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The department discussed the matter with OGRA, whereas the management explained that periodic inspections of all licensed LPG facilities are being undertaken by OGRA.

The Audit has recommended that the licensing process and market oversight mechanism be reviewed and the grant of license to 194 companies be justified.

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