The Oil and Gas Regulatory Authority (Ogra) is likely to increase Compressed Natural Gas (CNG) prices by Rs 3 for Zone-1 comprising Sindh and parts of Punjab and Rs 5 for zone-2 comprising parts of Punjab, Balochistan and Khyber Pakhtunkhwa, Business Recorder has learnt.
According to sources, after the approval of the new CNG price in Zone-1 would be Rs 63 against current price of Rs 59.70 per kg and in Zone-2 CNG price would be around Rs 66 per kg. The All Pakistan CNG Association (APCNGA) and the Ministry of Petroleum on July 12 had agreed to increase CNG price by 7 percent in a bid to reduce price differential between CNG and petrol prices. At present, the CNG price is equal to 48 per cent of petrol price and in case of increase the price would be 55 per cent of the petrol price.
According to estimates in Pakistan nearly 4 million vehicles are using CNG as fuel including public service vehicles. Nearly 4,000 CNG stations are operating across the country, providing direct employment to some 25,000 persons and indirect employment to an additional 100,000 persons.
Currently in Punjab CNG stations are being closed as par gas load-management plan for two and half days and in Sindh province for two days, due to severe shortage of the gas. The Petroleum Ministry had already recommended to the Economic Co-ordination Committee (ECC) of the Cabinet to jack up CNG price by 17 per cent.
Ministry of Petroleum and CNG Association agreed in July on taking the gas price for compressed natural gas outlets to 55 per cent of petrol price, a seven per cent increase. Ghiyas Abdullah Paracha said APCNGA is quite sure that petroleum minister will play his vital role providing relief to 40 million people.
In July meeting APCNGA and petroleum ministry decided that a new gas distribution formula on equal basis will be devised with the consent of all stakeholders and equal distribution of load management will be initiated. Earlier, it was being said that the government is trying to devise a formula to bring CNG prices equivalent to those of petrol.
It was also said in the news reports that the government is all set to increase CNG prices by Rs 30 per kilogram to bring it closer to the petrol price; the CNG Association threatened to go on strike if prices would be equalised with those of petrol.
Paracha said that the government and CNG Association have agreed on a formula for the increase in CNG prices according to which the Federal Cabinet will now approve new prices. According to the ministry's recommendations, a 15 per cent price increase has been sought for bulk domestic consumers, commercial consumers, cement and power plants of Water and Power Development Authority (Wapda) and Karachi Electric Supply Company (KESC).
For the industrial sector including textile industry, captive power plants and feedstock of fertiliser plants, an 18.43 per cent increase has been suggested. The ministry has sought a rise of 36.26 per cent in gas tariff for independent power plants (IPPs) while for the fertiliser sector it has proposed a hike of 96.06 per cent.