ISLAMABAD, November 8, 2026: The federal government has introduced a new auction system for liquefied petroleum gas (LPG), allocating 90 percent of domestic production to private marketing companies through competitive bidding and reserving the remaining 10 percent for public-sector companies.
The move aims to improve LPG availability, promote transparent distribution and address concerns over unfair pricing as consumers in several cities face rising fuel costs.
The decision was discussed at the first meeting of a committee established to oversee the transparent auction of locally produced LPG. The meeting was chaired by the Petroleum Secretary.
Under the new framework, domestic LPG producers will allocate 10 percent of their total output to government-owned marketing companies. The remaining 90 percent will be offered through transparent auctions conducted in the presence of media representatives.
To prevent excessive concentration of supplies, each eligible company will be allowed to purchase a maximum of 20 metric tonnes of LPG per day through the auction mechanism.
Officials said the system is designed to provide equal opportunities to eligible marketing companies and encourage greater competition in the domestic LPG market.
The committee also decided to introduce daily monitoring of domestic LPG production. Production figures will be compiled and submitted to Prime Minister Shehbaz Sharif to support oversight of supply and distribution.
Federal Minister for Petroleum Ali Pervaiz Malik said addressing public concerns over LPG availability and unfair pricing remains a government priority.
He said the new auction mechanism is expected to support equitable distribution, strengthen the LPG supply chain and contribute to energy security.
The minister added that the government’s objective is to improve access to LPG at reasonable prices, particularly for households and businesses dependent on the fuel.
The initiative comes amid concerns over unusually high LPG prices, with consumers in Lahore and Karachi reportedly paying up to Rs600 per kilogram in some areas.
The federal cabinet approved the transparent LPG auction framework on November 4, 2026, paving the way for its implementation.
The effectiveness of the new system will depend on auction transparency, production monitoring and whether improved distribution translates into more stable supplies and prices for consumers.