The Federal Government has approved a set of policy guidelines for the installation of LPG Air-Mix Plants (AMP) by the private sector. These guidelines aim to facilitate the establishment of LPG AMPs, in accordance with Clause 3.4.4 of the LPG (Production & Distribution) Policy, 2016, and Section 21 of the OGRA Ordinance 2002. The guidelines, as conveyed by the relevant authorities, are as follows:
i) Private sector entities will have the freedom to establish LPG AMPs based on commercial considerations, assuming all associated costs and liabilities, while adhering to the licensing and operational requirements outlined by the Oil and Gas Regulatory Authority (OGRA). It should be noted that the LPG supply preference or dedication mentioned in clauses 3.1.1 and 3.6.7 of the LPG Policy 2016 will not be applicable to LPG AMPs developed by the private sector. However, such AMPs may be entitled to purchase LPG in bulk at the Producer’s Price, as notified by OGRA from time to time.
ii) The tariff for LPG AMPs developed and operated by the private sector will be deregulated, allowing flexibility in pricing mechanisms.
iii) LPG-Air Mix Plant Licensees will have the same status as LPG Storage, Filling, and Distribution Plants, enabling them to import LPG in accordance with the prevailing Trade Policy and other applicable Policies/Laws/Rules or instructions/directives of the Federal Government.
iv) The LPG AMP licenser/developer/owner of the society is prohibited from preventing consumers/suppliers from switching to alternative competing fuels provided by any third party, such as piped natural gas or LPG cylinders, other LPG Air Mix Plants, Virtual LNG projects, etc.
v) LPG AMP licensees must notify consumers of the monthly tariff and submit detailed monthly tariff information to OGRA by the 10th of each month.
vi) OGRA will ensure that LPG AMP licensees do not take any measures to impede the marketing of LPG cylinders in areas where LPG Air Mix is supplied.
vii) OGRA, as the regulator of the LPG sector, will handle complaints resolution related to the pipeline network for LPG distribution and metering to households, similar to its role in the Natural Gas sector.
“The Oil and Gas Regulatory Authority is requested to comply with the above-mentioned policy guidelines, with due regard to this directive”, Ministry of Energy (Petroleum Division).
