Pakistan's LPG crisis deepens, prices attack PKR 600/kg, hundreds of trucks stranded at Iran border

Pakistan is grappling with liquefied petroleum gas (LPG) shortages and rising prices after the closure of two border crossings with Iran cut off supplies, Reuters reported.

The Gabd-Rimdan and Taftan crossings were closed on 17 October, with the two countries offering different explanations. Pakistan’s Balochistan government cited security concerns and efforts to curb smuggling, while Iran’s foreign ministry attributed the closure to technical issues.

According to the Pakistan LPG Association, Pakistan imports around 7,000 metric tons of LPG from Iran daily. More than 4,000 tonnes of daily supply passes through Gabd-Rimdan alone, said Shamsul Haq, former president of the Gwadar Chamber of Commerce and Industry.

“These imports are stopped,” Haq told Reuters.

The disruption raised LPG prices within days. Traders said the price of a 12kg bottle had risen to 7,000 Pakistani rupees ($25) from 4,500 rupees ($16), with further increases possible if supplies remain disrupted.

LPG prices are rising in Pakistan

The impact of the supply disruption is already being felt across the country. Pakistan LPG Association chairman Irfan Khokhar told Reuters that a 12kg cylinder sold for around 7,000 rupees in Balochistan, 7,500 rupees in Lahore and 8,200 rupees in Skardu.

Khokhar warned that shortages and rising prices could intensify. He also said that higher LPG prices are contributing to the increase in the cost of other goods.

Farhat Abbas, a resident of Lahore, told Reuters that the price he paid for LPG had doubled or more since the crossings were closed. Earlier he was paying 250 rupees per kg but now he was paying between 500 and 600 rupees per kg.

Consumers fear that supply constraints could worsen as winter approaches, when demand for fuel may increase.

Trucks stranded as business comes under pressure

Border closures have also disrupted the movement of goods between the two countries. Haq said hundreds of trucks, including LPG tankers, were stuck on both sides of the border.

More than 1,000 Pakistani containers of potatoes, bananas and rice destined for Iran were also seized, he said. The Gabd-Rimdan crossing was reopened for Pakistan’s exports of perishable goods on Wednesday, though LPG imports remained halted, according to a report.

The Quetta Chamber of Commerce and Industry has advised its members to suspend new orders from Iran until further notice.

Truck drivers were stuck at the described crossings for long days of waiting in difficult conditions with limited access to basic equipment. One driver, Abdul Ghani Baloch, told Reuters he had been waiting more than a week for the border to reopen.

Pakistan and Iran are in talks to resume trade

The disruption comes at a time when Pakistan and Iran maintain significant cross-border trade ties. According to the Federation of Pakistan Chambers of Commerce and Industry, bilateral trade in fiscal year 2023-24 was about $2.8 billion, including about $684 million in Pakistan’s exports.

Pakistan’s army chief visited Tehran this week to discuss the US-Iran war and also hold talks with Iranian leaders on border issues. Iran’s foreign ministry said consultations were underway to resume trade.