Government set to raise CNG price by Rs 4.5 per kg

The government has decided to increase Compressed Natural Gas (CNG) price by Rs 4.5 per kg to bring CNG price at 55 percent parity level with petrol. The Petroleum Ministry wanted to impose Gas Development Surcharge on CNG sector, which would be collected from the owners.
According to top petroleum ministry officials the surcharge would be utilised for laying Pakistan-Iran Gas Pipeline, Turkmenistan-Afghanistan-Pakistan-India gas pipeline and Liquefied Natural Gas (LNG) pipeline from Karachi to Lahore. "To make GDS a law, a summary has been tabled before the National Assembly on Thursday. After approval of the summary CNG price would be increased by Rs 4.5 per kg," the official added.
The government and APCNG Association on July 12, 2011 agreed on a formula that there would be a price differential of 45 percent between CNG and petrol, since then petrol prices at international as well at national level have registered a sharp increase, but the government did not increase CNG prices.
The government in July-October also tried to increase CNG prices, but the proposal was withdrawn in the face of fierce resistance from CNG station owners. In October, the All Pakistan CNG Association (APCNGA) requested the government to increase CNG prices by Rs 2 per kg, pleading that heavy usage of generators for smooth functioning of CNG pumps in the face of unprecedented electricity load-shedding, has resulted in additional burden on the owners.
An official privy to the deliberations said in accordance with the agreement between All Pakistan CNG Association and the Ministry of Petroleum, CNG price would be increased by Rs 4.5 per kg on account of increase in electricity price, while Rs 4 per kg levy on CNG would also be imposed. Formula is yet to be finalised in this regard.
Commenting on the proposed increase in CNG prices, Ghiyas Abdullah Paracha, central chairman of All Pakistan CNG Association said that his body has requested the parliamentarians not to pass the bill. He said imposition of GDS and PL on CNG sector through a bill will increase CNG prices by Rs 8 per kg. "This price is much higher and nearer to the petrol price which the masses and the CNG station owners cannot afford," he added.
The gas load-shedding, zero gas pressure, higher utility bills and overall inflation has already destroyed the business of CNG industry and this new increase will push them towards total destruction, Paracha maintained. He said CNG stations have been suffering huge losses. Public, transporters and all CNG consumers are not happy with the current situation and are not in position to buy CNG on higher rates. Paracha said CNG price increase will have multiple effects on the overall economy of Pakistan as according to him over 35 million vehicles are using CNG as fuel and the consumers will shift to petrol which would increase the import bill.