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BR Research

CNG ban - a practical approach?

Published December 23, 2011 Updated December 23, 2011 12:00am

cngAs if the fear of a suicide attack or a blast just around the corner was not enough, masses are now travelling on a omb itself. The recent rise in CNG cylinder explosions with almost 50 people losing their lives in November has raised concerns over the CNG sector to alarming heights. Compressed natural gas CNG was introduced by the state in 1992 to alleviate the dependence on imported oil and improve the environment. However, the acute natural gas availability has left policymakers in disarray. Going forward, with not much luck on the exploration side and skyrocketing demand for natural gas, the gap between supply and demand is expected to widen. If supply continues to remain around 4,000 mmcfd for the next few years, the shortfall, which stands at 1,000 mmcfd, will escalate by 100 percent to 4,000 mmcfd till 2014. With immense gas shortage on the horizon, coupled with the loss of investor interest in the region due to various reasons, gas load management has been tricky for the government. Lately, the cabinet has decided to ban CNG kits and is further considering a complete ban on CNG in public transport. The action might be late but is not completely unjustified. Pakistan might have topped the CNG consumption charts leaving Argentina and Brazil behind, but it cannot deny the damage CNG has done in terms of natural gas exploitation. A ban on CNG for the transport sector makes sense as it has taken away focus from the industrial sector where there is no alternate source of energy. Be it the Prado or the mini bus all queue up for CNG. During FY12, the gas crisis has led to a shortfall of 150,000-200,000 tons in urea production and a fall in textile exports for November FY12 by more than 30 percent. The need of the hour is a justified gas prioritisation plan that does not have a myopic vision and industrial output is not compromised for short-term gains. Great opportunity lies with an altered energy mix: LPG at gas stations and solar heaters and geysers at home can seriously ease consumption in the transportation and domestic sectors, respectively.

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