New sale price of CNG notified: two-tier slab structure adopted

Oil and Gas Regulatory Authority (Ogra) on Friday notified new maximum sale price of CNG ranging between Rs 55.78 to Rs 58.55 per kg by adopting two-tier slab structure effective today (Saturday), after CNG Dealers Association (CNGDA) expressed serious concern over Gross Calorific Value (GCV) based pricing formula terming it a deviation from the decision of the Economic Co-ordination Committee (ECC).
According to documents available with Business Recorder, Ogra decided to restore two-tier pricing mechanism after All Pakistan CNG Association (APCNGA) and CNGDA developed strong differences over pricing mechanism as the former supported four-tier gas pricing mechanism implemented on March 1, 2011 whereas the latter strongly opposed it.
Ogra has notified Rs 58.55 per kg CNG at Rs 1070 per British thermal unit (Btu) for Region-1 (KPK, Balochistan and Potohar Region and Rs 55.78 per kg at Rs 950 per Btu for Region-11 (Sindh, Punjab (excluding Potohar region).
Ogra said in the notification that "four-tier slab structure implemented in the CNG price effective March 1, 2011 has been gotten away owing to feedback from various stakeholders including CNG associations. These prices will stay in vogue till such time any further notification is issued."
Documents reveal that APCNGA through various correspondences to Ogra had requested revision of the sale price of CNG in those areas where sharp increase in GCV had been witnessed resulting in loss to various CNG stations especially in the areas of Sargodha region.
In order to address the grievances, a meeting was convened on March 18, 2011 in Ogra with the representatives of CNG Associations to address their issues and queries including CNG price notification effective March 1, 2011.During the meeting, Ghiyas Abdullah Paracha, Chairman APCNGA fully supported the four-tier system saying that it would result in rationalised CNG prices in different parts of the country.
However, Malik Khuda Buksh, Chairman CNGDA expressed dissatisfaction over the deviation from the ECC decision/approved parameters while adopting the Btu based pricing mechanism. He further stated that the new system had resulted in price decline of Rs 1.88 per kg in Karachi and Sindh, which was not acceptable and demanded restoration of the previous pricing mechanism.
He also emphasised that if the new BTU system was to be implemented then an additional Rs 1.50 per kg adjustment be made provided in the Memorandum of Understanding (MoU) duly approved by the ECC. Moreover, concern was also voiced over the variation in generation charges, ratio between diesel and electricity and change of conversion factor for kWh to kg.
It was mutually agreed by all the participants that to address the grievances, the previous pricing mechanism system be restored while giving suitable adjustment to Faisalabad and Sargodha (in summer months) and also catering for higher Btu price for Potohar regions. Moreover, it was also agreed upon that upper slab shall also be revised from 1040 Btu to 1070 Btu based on the high Btu gas at Potohar regions.