Disrupted LPG supply

THE petroleum minister’s explanation in the National Assembly that the recent closure of the Iran border has disrupted liquefied petroleum gas supplies and driven up prices identifies a major cause of the current crisis. The subsequent partial border reopening has failed to ease the shortage. While the closure may have triggered the present shortages and price hike, the problem recurs every winter. Pakistan produces only about a quarter of the LPG it needs. The rest is imported, mainly from Iran. The disruption of cross-border trade has therefore exposed the vulnerability of a market that depends heavily on external supplies. The Iran war has also complicated efforts to bring in more by sea. The minister says efforts are being made to increase seaborne supplies, but consumers have yet to see relief.

The state must explain what additional volumes have been secured, and when they will arrive. Further, why were no contingency measures taken before the Iran border closure, especially when the authorities knew that the onset of winter would push up demand? The decision-makers owe an explanation to people suffering due to sudden shortages and price shock. That said, the current LPG supply disruption is only part of the wider story. LPG prices have historically surged as winter approaches, even without a major supply shock. This recurring pattern suggests that the crisis is not simply the result of border closure. Inadequate advance planning, weak market oversight and the failure to build reliable supply arrangements leave consumers exposed whenever demand rises or imports are interrupted. The consequences are…