Catch up on the essentials
- Pakistan is opening its LPG import market to private competition and directing state-owned companies to arrange bulk purchases through government-to-government and business-to-business arrangements, Petroleum Minister Ali Pervaiz Malik said.
- Malik also said additional LNG could be arranged for the piped-gas network if required during December and January, with uninterrupted domestic service during mealtimes treated as a priority.
- Importing companies will be required to follow prescribed procedures, while auction revenue will go to the national exchequer for subsidies and consumer relief.
Selected from this article · 2026-11-04
Read on for the full pictureImport competition targets Pakistan’s supply gap
Pakistan is opening its LPG import market to private competition and directing state-owned companies to arrange bulk purchases through government-to-government and business-to-business arrangements, Petroleum Minister Ali Pervaiz Malik said. The measures are intended to replace disrupted western-border supplies, which previously met nearly half or more of domestic demand, while also drawing on the private import market.
Saudi Arabia and Oman were identified as potential supply sources. Pakistan State Oil, SSGC LPG and Pakistan LNG were instructed to pursue bulk arrangements, and Malik said the companies had made considerable progress, although he disclosed no negotiated quantities or shipment timetable. An existing agreement with OQ Trading Limited covers petroleum products, while Malik did not clarify whether a digitally signed agreement with Oman specifically includes LPG.
Domestic capacity leaves most demand exposed
Pakistan’s annual LPG demand is approximately 2.4 million tonnes, or 6,500–7,000 tonnes per day. Domestic production supplies about 2,000–2,500 tonnes per day, depending on crude processing and refinery output. Two terminals operated by Engro and SSGC LPG provide combined storage capacity of approximately 14,000 tonnes and receive additional seaborne supplies.
The imbalance means alternative imports and storage capacity remain central to winter availability. Malik also said additional LNG could be arranged for the piped-gas network if required during December and January, with uninterrupted domestic service during mealtimes treated as a priority. The reviewed reporting did not specify the quantity, contract status or arrival schedule for those purchases.
Auction reform changes local distribution
Prime Minister Shehbaz Sharif said the decades-old LPG monopoly had ended and locally produced volumes would henceforth be allocated through competitive, supervised auctions. Importing companies will be required to follow prescribed procedures, while auction revenue will go to the national exchequer for subsidies and consumer relief.
This applies a market-opening mechanism to domestic LPG as well as imports. It could widen participation in allocation, but the reported evidence does not establish that the new mechanism has yet reduced retail prices or secured additional physical supply.
Supply policy faces infrastructure constraints
Regional instability, maritime disruption and higher international prices have exposed limits in Pakistan’s energy logistics. Malik said existing facilities cannot accommodate very large gas carriers or very large crude carriers, while securing smaller pressurised LPG carriers is also difficult. He said government efforts were focused on stronger energy security through fuel storage, refining capacity and the LPG supply chain.
Those constraints matter because nominal sourcing agreements do not necessarily translate into prompt deliveries. The next observable test is whether the government publishes contracted LPG quantities, schedules and delivery costs, and whether the planned auctions and competing imports translate into lower cylinder prices and adequate winter stock.
Industry and product implications
Industry / product | Disclosed fact | Demand interpretation | Verification signal | Main risk |
|---|---|---|---|---|
LPG import arrangements (midstream) | Pakistan State Oil, SSGC LPG Limited and Pakistan LNG Limited were directed to arrange bulk LPG imports through government-to-government and business-to-business agreements. [2] | Disclosed demand; planned. State firms would book bulk supply while private importers are encouraged to compete, potentially broadening available import channels. | Future disclosures should confirm contracted quantities, shipment schedules and actual cargo arrivals. | Malik reported considerable progress but gave no quantities or arrival dates, while an Omani agreement was not confirmed to cover LPG specifically. |
LPG from Saudi Arabia and Oman (upstream) | Saudi Arabia and Oman were identified as potential LPG supply markets for Pakistan. [2] | Qualified inference; planned. Additional G2G and commercial purchases could replace supply lost through border closures with Iran. | A subsequent disclosure should identify an LPG-specific agreement or shipment from either market. | Potential supplier status does not establish a completed LPG contract, and existing Omani petroleum-product coverage does not confirm LPG coverage. |
Local LPG allocation (midstream) | Locally produced LPG will be allocated through competitive, supervised auctions, with importers required to follow prescribed procedures. [1] | Disclosed demand; planned. Transparent auctions may replace quota-based allocation, with auction proceeds supporting subsidies and consumer relief. | Publication of auction rules, results and allocation volumes would verify implementation. | Reform of allocation does not by itself increase physical LPG supply or guarantee lower retail prices. |
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