Initially the market for LPG was only the ‘kachi abadis’ of Pakistan and the rural areas which were devoid of petrol or natural gas facilities. However, now as mentioned earlier the rising prices of oil have driven the adoption of the LPG product in the urban areas of Pakistan as well as an alternative to petrol. However despite its characteristic of being convenient and cheap it is still much expensive than the natural gas that is widely available in Pakistan, however the unavailability of natural gas and the shortages of natural gas that have been felt in the last few years since 2003 have sparked an increase for the demand of the LPG product all over Pakistan.
CurrentlyPakistandoes extract and produce LPG in the domestic market however the demand for LPG product is so high that the country has to import the LPG product form international sources as well. The main companies that are operating pinPakistanin the LPG sector include Sui Northern Gas Limited, Pakistan State Oil Limited and Shell Gas LPG (Pakistan). There have been large investments conducted by these companies for the infrastructure and the distribution of the LPG product. “Pakistan’s second-largest gas distribution concern Sui Southern Gas Company (SSGCL) set up a US$31mn LPG plant in the south of the country, with a consortium of local and overseas companies.”(‘AsiaWeekly Financial Alert’, 2003)This setup is a co-establishment of the Jamshoro Joint Venture and SSGCL which is set up inHyderabad. The capacity of liquefied petroleum gas production of this plant is 350 metric tones to 400 metric tons per operational day.