ISLAMABAD: The federal government has decided to abolish the existing discretionary quota system for liquefied petroleum gas (LPG), introducing a competitive auction mechanism aimed at ending market monopolies and ensuring transparent distribution.
The decision was discussed at the inaugural meeting of a committee established to supervise transparent LPG auctions.
Federal Minister for Petroleum Ali Pervaiz Malik said ensuring adequate LPG supplies and protecting consumers from unfair pricing were among the government’s key priorities.
He said the new arrangement would promote fair competition, improve supply distribution and strengthen the country’s energy security.
Under the proposed mechanism, LPG producers will be required to allocate 10 per cent of their locally produced gas to government-owned marketing companies for distribution in remote areas.
The remaining 90 per cent will be offered through open auctions conducted transparently in the presence of media representatives.
The committee decided that each participating company would be allowed to purchase a maximum of 20 metric tonnes of LPG daily.
It will also oversee daily production figures to ensure adherence to the new system and maintain transparency throughout the process.
Malik said all eligible companies would have equal opportunities to participate in the auctions, adding that the initiative was intended to improve availability and ensure reasonable prices for consumers.
The federal cabinet approved the new LPG auction framework on November 4, 2026.
Earlier, Information and Broadcasting Minister Attaullah Tarar said Prime Minister Shehbaz Sharif had ordered the introduction of a transparent, merit-based mechanism to encourage competition in the LPG market and facilitate consumers.
Tarar described the decision as a significant policy shift, saying the government intended to replace the existing concentration of market control with an open and competitive system.
Meanwhile, the Petroleum Division reiterated that transparent allocation of locally produced LPG remained a government priority.
In a statement, it said the new mechanism would provide equal opportunities to industry participants and address the concentration of supplies among a limited number of market players.
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