By Abrar Saeed ISLAMABAD, Dec 07 (INP-WealthPK): The efficient use of Liquified Petroleum Gas (LPG) can help ease the natural gas shortage in the country, particularly in the winter, when demand of the commodity for domestic use increases substantially. Although it has a minimal ratio, less than 2 percent in energy mix of the country, LPG provides a cleaner alternative to biomass-based sources in the areas where natural gas supply infrastructure is not available. LPG has also made inroads in the urban centres owing to outages and low pressure, especially in the peak winter season, which causes imbalance in demand and supply of the commodity. All Pakistan LPG Distributors Association Vice-Chairman Ali Haider said while talking to INP-WealthPK that LPG demand in winter increases manyfold as besides its regular consumers in the areas having no natural gas supply network, the people in the urban centres also turned to LPG due to low natural gas pressure and outages in cities. He said the government should give more incentives to producers and importers of LPG so that its shortfall in winter could be tackled, while its share in the power mix could be enhanced. Ali Haider also stressed the need for announcing the long-awaited LPG Policy, and incentives to be given to both the local producers and importers of the commodity. The LPG Association’s vice-chairman informed that around 25 percent of LPG is imported mainly from Gulf states and neighbouring Iran. According to data posted at Oil and Gas Regulatory Authority (OGRA) website, as compared to the local producers of the LPG, oil refineries and local gas fields, the importers of LPG are given an incentive of slash in general sales tax (GST) from 17 to 10 percent, whereas the local producers are made to pay 17 percent GST. Around 76 percent of the LPG consumed comes from local production in Pakistan, whereas the rest is imported. Refineries, gas producing fields and imports are three main sources of LPG supply in the country. LPG is gradually becoming popular domestic fuel among people who live in far-flung areas and where natural gas infrastructure does not exist. According to the figures given in the Economic Survey of Pakistan 2019-20, currently, LPG accounts for about 1.2 percent of the total primary energy supply in the country. This low share of LPG in the total energy mix is mainly due to supply constraints and the higher price of LPG in relation to competing fuels like natural gas, wood etc. The current size of LPG market is around 1,061,447 MT/Annum. It is primarily meant to supply for the domestic fuel requirement, especially in natural gas starved areas and in the urban territories during peak times. The use of LPG as domestic fuel shall deter deforestation in hilly areas and provide a comparatively healthier and hygienically safe alternative to the citizens. The government of Pakistan has taken a policy decision to allow use of LPG in the automotive sector to share the burden with conventional auto fuels. Subsequently, OGRA has laid down an elaborated regulatory framework for the supply of LPG to the vehicles. From 2008 onwards, OGRA started registration of LPG equipment manufacturing companies to eradicate substandard manufacturing, sale and use of LPG equipment. Currently, there are 11 LPG producers and 200 marketing companies operating in the country, with more than 7,000 authorised LPG distributors. To give boost to the sector, OGRA has simplified the procedure for grant of LPG licence and the same is granted on a fast-track basis once the requirements are met. During July-March 2019-20, one operational licence of LPG storage terminal, three licences for construction of LPG air-mix plant, 35 licences for construction of LPG storage and filling plants and 18 licences for operation of LPG plants were issued. In addition, OGRA has also issued three licences each for construction and operations of LPG auto-refuelling stations during the same period. Due to augmented investment and future expansion plans of the LPG marketing companies, significant investment in LPG supply and distribution infrastructure has been witnessed. LPG sector has also provided jobs to hundreds of unemployed people. During July-March 2019-20, an investment of approximately Rs3.72 billion was made in LPG infrastructure.