The Notified Rate and the Street Rate: Who Captures the Rs6,700 Inside a Cylinder

The notified rate is Rs279.34 per kilogram. In the same market, LPG is selling at Rs550 to Rs600 a kilo on the street, around Rs600 in Peshawar, and up to Rs750 in the northern districts of Khyber Pakhtunkhwa. Domestic cylinders are being quoted above Rs10,000.

As a set of inflation figures, this would not have been worth writing. What makes it worth writing is a single statement — attributed to an official — that if the notified rate were enforced, prices could cross Rs700 a kilo. A regulator's own official is warning that implementing his agency's own notification would push prices up. On paper it reads as an absurdity. On the ground of supply, it is entirely rational, and it is the cleanest documentary clue in this whole crisis. The notification is one line long. The story sits underneath it.

The architecture is simple. Pakistan imports roughly 70 per cent of its LPG requirement; the remaining 30 per cent comes from domestic production. The bulk of the imports move through the Taftan crossing, and Taftan was shut for five to six days. A single border post carrying three-quarters of the country's cooking gas is not geopolitical commentary; it is a hard supply-chain fact. OGRA's own spokesperson has conceded "some difficulties", which is an unusual admission for a regulator and the strongest corroboration in the chain.

But the pressure is not at the border. It is in the formula. Khyber Pakhtunkhwa is the epicentre because two failures have landed on the same households at once. A shortfall in pipeline gas had already pushed homes onto LPG as their fallback; that fallback has now doubled or tripled in price. Households without a pipeline connection have no substitute at all. This risk is not diversified. It hits the same household twice, in the same direction.

Start with the arithmetic. A standard 11.8 kg domestic cylinder, at the notified rate, comes to roughly Rs3,296. The same cylinder on the street is being quoted above Rs10,000. That leaves close to Rs6,700 per cylinder accumulating somewhere between the import point and the kitchen. The question is not whether money is being made. The question is what it is being charged against, and who decided that it could be.

The Rs279.34 notification is not a market price. It is an administrative reference whose expiry date has passed. If this were only transport margin and profit, the gap would run 20 to 25 per cent. A gap of two to two-and-a-half times can only be produced by a formula anchored to a previous import-cost cycle. The border closed, spot costs jumped, and the notified rate stayed where it was. That is the mechanical fault from which every link downstream builds its own books.

Which is why the geography reads so cleanly. Around Rs600 in Peshawar, Rs750 in the northern districts — a 25 per cent intra-provincial spread is not the price of fuel. It is the toll of last-mile logistics in mountainous terrain and of local scarcity. Where pipeline gas is weakest, extraction is fastest. The market's behaviour is rational. It is the rule's number that has stopped being so.

One thing is missing from the entire body of reporting, and its absence is itself the largest clue: across twenty-one information points there is not a single named company, distributor or marketer. A story whose central accusation is profiteering does not contain the name of a profiteer. There is no cost stack — no landed import cost, no distributor margin, no transport cost. Which means the split of that Rs6,700 between legitimate cost pass-through and rent extraction cannot be determined from the available information. That is an information gap, and policy is being debated against it.

Now the part that has been written about least and will last longest. Households in rural Peshawar are switching to firewood. The price of a maund has moved from Rs1,400–1,600 to Rs1,600–1,800 — a 14 to 20 per cent jump, which looks modest beside the LPG move and is in fact its second link. Per kilogram the wood costs Rs43–48 and looks cheaper on an energy basis too. But that cheapness is in cash, not in health. Air-dried wood carries roughly a third of LPG's energy density, so a household will burn more of it, put more smoke into the room, and put pressure on nearby forest at a rate that will not be reversed when prices fall back. The LPG shock is temporary. Its remedy is permanent damage.

Twenty years ago I learned a version of this lesson from attendance sheets. In 2026, in the week ITV Digital went into administration, I obtained the Football League's club-by-club exposure schedule — 30 of 72 clubs within a season of insolvency — and published the list name by name. In 2026, covering the Under-17 World Cup, I obtained the venue-by-venue bloc allocation sheets and understood that the 1.3 million aggregate was arithmetically correct and partly made of free school blocs. Both times the lesson was the same: a number that is quoted without a breakdown always has a part of it sitting in somebody else's account. With attendances you had to see the allocation. With prices you have to see the cost stack. The shopkeeper does not read the Rs279 notice board; he reads the Rs750 street. Both are correct. The problem is that policy is written from the first document while households live inside the second.

Here the familiar story needs to be set aside. The popular reading is that middlemen are looting. Profiteering is present — Rs6,700 is being held somewhere — but it is the opportunity in this story, not the cause. The opportunity is created by a formula that pins the rate to a stale cost base. Acting against retailers while leaving the formula unrevised treats the symptom and not the illness.

The second thing critics skip: enforcement is itself a risk. If action is sequenced so that supply withdraws faster than price falls, the official's warning will prove correct. In a market where distributors can credibly threaten to stand down, a regulator in practice has two instruments — notification and action — and neither works in the face of that threat. That is the trap. Action was deferred because deferring protected supply, and deferring also proved the value of the threat, which makes the next deferral easier. Nobody in that room was lying. That was the problem.

And one claim deserves to be cut down with numbers — the "world's highest LPG price". Rs750 a kilo works out at roughly $2.7 per kilogram. That is expensive, but not one country is cited to establish it as a global maximum. This is atmosphere, not analysis, and policy cannot be built on atmosphere.

The real empty space is elsewhere, and it is documentary rather than political. A national fuel crisis is unfolding in one province, and the federal energy ministry does not appear in the reporting, the provincial government does not appear, and no company appears. There is only the regulator, speaking three times and giving zero measurable commitments on all three — no figure, no date, no mechanism. "Work is under way", "there are difficulties", "it will be brought under control shortly" is not communication; it is the absence of it. The party that can credibly disrupt supply receives forbearance. The party that can only absorb receives the bill. The Rs6,700 will be found in that asymmetry, not in any single shopkeeper's greed.

What to watch is clear. First, whether Taftan reopens — this is the physical variable, and without it any price forecast is guesswork; five or six days is not enough to establish a trend. Second, whether the notified rate is revised — the only measure that actually removes the opportunity, and one that has not appeared in any official statement. Third, who the enforcement lands on: the retailer or the bulk layer. Fourth, where the price of a maund of firewood settles, because that crisis will outlast this one.

If the action lands on the shopkeepers who are visible and have no bargaining power, the same question returns next time with a wider gap. And still nobody will have a name.