The Fuel of the Poor Is Running Dry

For millions of Pakistani households beyond the reach of the gas pipeline, LPG is not a convenience. It is how dinner gets cooked and how a room stays warm in a Gilgit-Baltistan January. Yet as winter arrives, the fuel is scarce again and the street price has run far past the official one. In Lahore, cylinders were reported selling at about Rs570 per kg in late October, while the Oil and Gas Regulatory Authority’s (OGRA) June ceiling was Rs308.76 per kg. The gap between the notified price and the real price is the story of a market that does not have enough gas.

To see why, it helps to look at the neighbors.

India consumed 33.2 million tonnes of LPG in fiscal 2025-26, up 6 percent on the year. Its refineries and gas processors produced 13.1 million tonnes, a record, up from 12.8 million tonnes in each of the previous two years. The remaining 21.3 million tonnes, more than 64 percent of consumption, was imported. The year before, imports were 20.7 million tonnes against consumption of 31.3 million.

That dependence is concentrated. Roughly 90 percent of India’s imports come from the Gulf, so when the war around Iran disrupted the Strait of Hormuz this spring, India felt it at once. March consumption fell nearly 13 percent, and January-June 2026 consumption was 14.74 million tonnes against 15.95 million a year earlier. The Petroleum Planning and Analysis Cell said the drop reflected lower availability, not weaker demand.

What India did next is instructive. New Delhi ordered refineries to divert feedstock from petrochemicals to LPG, lifted output to about 55,000 tonnes a day against a 35,900 average, and then set emergency production caps of 63,810 tonnes a day across 21 plants. It also began diversifying suppliers, including the United States. India still rationed and suffered, but it had domestic production on a scale that could be pushed, and a state that pushed it.

India is also trying to shrink the import bill at its source. Under the SATAT scheme and the GOBARdhan programme, cattle dung, crop residue and kitchen and municipal food waste are fed into digesters, where anaerobic digestion turns them into methane-rich biogas. Purified and compressed, it becomes compressed biogas (CBG), sold into city gas networks and as vehicle fuel. The by-product is organic manure, which farmers can use as fertiliser.

The programme is real, but it has not replaced LPG. As of January 2026, about 132 to 133 CBG plants were operating, producing roughly 920 tonnes a day. Commercial CBG sales were about 31,400 tonnes in 2024-25, up from roughly 19,000 to 20,000 the year before. Set against 33.2 million tonnes of LPG consumption, that is about 0.1 percent. Even if every plant ran flat out all year, output would be about 336,000 tonnes, roughly 1 percent. The original SATAT goal was 5,000 plants producing 15 million tonnes a year by 2023-24, so the rollout is far behind.

The reasons are practical. Collecting dung and straw from thousands of small farms is hard, and supply is seasonal, so plants often run at only 20 to 60 percent of capacity. Only about 15 percent are connected to city gas pipelines; the rest depend on costly truck deliveries. Developers deal with more than eight government departments, and offtake contracts are short-term. A 1 percent CBG blending obligation began in 2025-26 and rises to 5 percent by 2028-29, which should help guarantee demand. Note also that CBG is chemically methane, the same gas as piped natural gas, while LPG is propane and butane. Biogas displaces LPG mainly where households and businesses switch to piped gas or to their own digesters, not cylinder for cylinder.

India’s experience is a caution as much as a model: waste-to-gas is a useful supplement, not a quick substitute.

Afghanistan has no significant domestic LPG production. Traders quoted by Reuters put annual demand at about 700,000 tonnes, all of it imported. The supply map has shifted sharply. After the European Union banned Russian LPG in December 2024, Moscow redirected cargoes east: Russian shipments to Afghanistan, including supplies from the Kazrosgaz venture, rose roughly 1.5 times to 418,000 tonnes in January-November 2025, partly at the expense of sanctioned Iranian supply. Turkmenistan and Uzbekistan have also been suppliers. Afghanistan’s lesson is that a country with no refinery can still keep cylinders flowing if it buys by rail and truck from several directions and does not depend on a single sea lane.

Pakistan’s numbers are smaller, but the structure is the same. Industry figures put annual demand at about 2 million tonnes: roughly 800,000 tonnes produced locally, 1.2 million imported. A senior OGRA official said in October that imports cover about 70 percent of requirements. The government’s Annual Plan shows LPG imports of 1.5 million tonnes in 2025-26, against a target of 1.05 million, and plans 1.55 million tonnes for 2026-27 alongside a domestic production target of only 0.75 million.

Daily figures show the problem. Local production is 2,000 to 2,500 tonnes a day. Normal consumption is 4,000 to 4,500 tonnes. In peak winter, demand passes 6,000 tonnes, and last January it hit a record 7,000 when a cold wave coincided with low pressure in the piped gas network. Households that cannot get pipeline gas switch to cylinders, and the shortfall lands on the poorest.

Several things have hit at once. Pakistan sources much of its imported LPG from Iran, by land and sea, and the Gabd-Rimdan and Taftan crossings were closed on October 17, cutting imports at the start of the heating season. Earlier, the Hormuz disruption slowed sea cargoes. Stocks are shallow: in March the FPCCI’s LPG committee said the country held only 13 to 14 days of cover, which cannot absorb a border closure. OGRA’s monthly price ceiling applies to imported and local gas alike, and Jamshoro Joint Venture told the government in June that this makes imports commercially unviable. Importers who lose money on a cargo stop ordering, and the gas then reappears on the black market at a higher price. Meanwhile, declining domestic natural gas production pushes more households toward LPG just as supply tightens.

India imports about 21 million tonnes a year, roughly 14 times Pakistan’s 1.5 million. Scale lets India negotiate, charter, and restructure its refineries. Pakistan buys in small parcels, from a few suppliers, with thin stocks and a price rule that punishes the importer.

First, fix the price rule. A ceiling that sits below landed cost does not lower prices; it empties shelves. OGRA should set separate benchmarks for imported and local LPG, publish the formula, and adjust it fast when freight or exchange rates move. Consumer protection then means enforcement against hoarding, not a notification that is ignored.

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Second, hold real stocks. India’s emergency production caps and Pakistan’s own request that marketing companies file daily stock reports point the same way: visibility is the start of control. Pakistan should require and publish stock data weekly, set a minimum strategic reserve before winter, and use that data to catch hoarding early. Whether analytics software or a spreadsheet does the job matters less than whether the data exists and someone is accountable for acting on it.

Third, diversify routes. Relying on one overland corridor from Iran and one sea lane through the Gulf is the weakness Delhi is now spending heavily to fix. Oman, Iraq, and other suppliers, plus more cargoes into Karachi and Port Qasim, should be contracted before the next crisis, not during it.

Fourth, look north, with eyes open. Turkmenistan and Uzbekistan are plausible overland sources, and trade through Afghanistan could cut freight costs. But Afghanistan is itself a net buyer of about 700,000 tonnes, competing for the same Russian and Central Asian molecules, and the route depends on borders that have been closed repeatedly. It can supplement Pakistan’s supply. It cannot replace sea imports on its own.

Fifth, produce more at home. Pakistan’s 2026-27 target of 0.75 million tonnes is below what refineries and gas processors already deliver by industry estimates. India shows that refinery output can be raised quickly when the state decides to. Gas processors and refiners here need clearer pricing and guaranteed offtake to invest.

Sixth, pilot waste-to-gas where the feedstock already exists. Pakistan’s large rural livestock population and farm residues make household and village-scale biogas digesters a sensible winter hedge for off-grid homes, and they would ease demand on cylinders. India’s record shows what to plan for: guaranteed offtake, organised collection of dung and crop waste, and one clear regulator instead of many. Even then, expect a modest share of supply, not a replacement for LPG.

The poorest cylinder buyers do not follow forward contracts or border negotiations. They see Rs570 on the day the cold arrives. Governments that treat LPG as a market to be managed only when prices spike will keep being surprised by winter. India shows what scale and state direction can do. Afghanistan shows what diversified supply can do. Pakistan has neither yet, and the bill falls on those least able to pay it.