Govt likely to approve deregulation of CNG market

OGRA has sent summary to petroleum ministry for its nod

ISLAMABAD: Oil and Gas Regulatory Authority (Ogra) Chairman Saeed Ahmed Khan has revealed that the body has sent a summary proposing deregulation of the compressed natural gas (CNG) market to the Ministry of Petroleum and Natural Resources.

Briefing members of a sub-committee of the Standing Committee on Cabinet Secretariat, which met at the Parliament House on Thursday with Senator Shahi Syed in the chair, Khan voiced hope that the ministry would approve the summary soon and CNG shortages would come to an end as the government was undertaking steps to resolve the energy crisis.



“Work on the liquefied natural gas (LNG) pipeline will be completed by the end of April 2017,” he said.

Committee members expressed concern over what they said injustice faced by the CNG sector for the last over two years. They also opposed the burden of extra taxes on CNG stations which were imposed by Ogra.

All Pakistan CNG Association Sindh Zone Chairman Shabbir H Sulemanjee told the committee that 2,200 CNG stations stayed shut in Punjab and now some elements were trying to close the outlets in Sindh, Balochistan and Khyber-Pakhtunkhwa as well.

Unfortunately, he said, more than two years had passed, but CNG prices had not been increased because somebody wanted to destroy the business. Gas stations were also paying withholding tax, which was unlawful, and they were facing a loss of Rs67 billion due to the ‘unlawful’ taxes on the sector, he said.

The committee members directed the Ministry of Petroleum to call representatives of gas distribution companies - Sui Northern Gas Pipelines Limited and Sui Southern Gas Company - in the next meeting, which would be held after two weeks.

They asked as to why Ogra had imposed 5% general sales tax (GST) on LNG supply to Punjab while other provinces were paying 17% GST and called it a big discrimination. They told Ogra to come up with a detailed reply in the next meeting. 

Published in The Express Tribune, January 29^th,  2016.

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