‘Govt may save $2.1bn forex annually if 50MMCFD gas allocated to CNG sector’

ISLAMABAD: “Federal government may save foreign remittance of approximately $ 2.1 billion per annum along with a 50 percent cut in public transport fares if it allocates at least 50 million cubic feet per day (MMCFD) gas to the CNG sector till the commencement of Liquefied Natural Gas (LNG) import by the private sector for the CNG sector”.

Ghiyas Abdullah Paracha, Group Leader All Pakistan CNG Association (APCNGA) said this during a media briefing which was held here on Tuesday.

He said that he had prepared recommendations for the incumbent government to put the country’s economy on track, save the foreign exchange reserves by approximately up to $ 2.1 billion annually under the head of fuel import bill and to provide massive relief to the general public in the form of a 50 percent cut in the public transport fares, creating job opportunities and minimizing environmental pollution by ensuring a gigantic reduction in the carbon emissions with the use CNG as a fuel for motor vehicles.

The government should allocate at least 100 MMCFD gas to the CNG sector till the commencement, Paracha said. “Revival/expansion of the CNG sector can generate thousands of new job opportunities while the use of CNG as an alternative fuel for motor vehicles is equivalent to having an environmental benefit of 152.63 million trees per annum”, he added.

Paracha also said that the CNG is still cheaper than prevailing petrol price while its price will be cheaper than petrol price if the private sector is allowed to import LNG for the CNG sector of the country.

According to Paracha, at present, the CNG is 10.4 percent cheaper than the prevailing price of gasoline in the country while the government is giving subsidies in petrol price and has fixed the petroleum levy (PL) and general sales tax (GST) at zero level.

He also said if the government allows the private sector to import LNG for the CNG sector then approximately $ 2.135 billion (PKR 419.87 billion) can be saved with import of 300 MMCFD LNG to the country and CNG can be cheaper by 18.631 percent than the current gasoline price.

“General public can find significant 50 percent relief in fares with the use of CNG as a fuel in the public transport”, said Paracha.

Quoting Finance Minister Miftah Ismail’s target of reducing $ 22 billion during the next one year (FY 2022-23) out of the total deficit of $ 42 billion, the APCNGA group leader said that the private sector can be helpful in meeting this target by approximately 10 percent only if it is allowed to bring LNG for the CNG sector and utilize the unused LNG terminal capacity.

“We assure the government that positive change can be brought within no time if the private sector is given timely support and cooperation by the government”, said Paracha.

Speaking on the occasion, Paracha also demanded from the government to grant permission to use the surplus (private) terminal capacity of LNG terminal and authorization for utilising the unused contracted terminal regasification capacity of the LNG terminal.

Similarly, all provincial chief secretaries/transport secretaries should be directed to encourage the owners/transporters to convert their public service vehicles to the environment friendly and cheaper CNG fuel and revise the gas allocation priority list in consultation with the stakeholders.

Furthermore, support the CNG sector by giving a level playing field for business. Sharing details of CNG stations established across the country with an investment of approximately Rs 350 billion, Samir Gulzar, the central chairman of the APCNGA said that total 2,300 CNG stations are established in the country and out of which 1,100 CNG stations are located in Punjab, 600 CNG stations are situated in Sindh, 575 CNG and stations are operating in Balochistan province.

He said approximately 50 percent of the total CNG stations of Punjab have suspended operation due to the non-availability of gas. He also said that Rs 150 billion investment so far made in developing the CNG kits has been facing serious danger due to the closure of CNG stations and the non-availability of gas as a fuel for motor vehicles.

He said direct and indirect employment in the CNG sector is 5.1 hundred thousand. Total gas consumption required by the entire CNG sector is 400 MMCFD, said Paracha.

Copyright Business Recorder, 2022