The government has reverted to the old mechanism for fixing prices of compressed natural gas (CNG) by dividing the country into two regions, pushing up prices by up to Rs2.33 per kilogramme for Sindh and Punjab consumers.
The Oil and Gas Regulatory Authority (Ogra) on Friday abolished a four-slab structure for CNG prices and again divided the country into two zones - region one comprising Khyber-Pakhtunkhwa, Balochistan and Potohar, northern Punjab and region two consisting of Sindh and rest of Punjab.
“The four-slab structure introduced last month (March 1) has been abolished owing to the negative feedback from various stakeholders including CNG associations,” said the oil and gas regulator.
CNG prices for Sindh and regions of Punjab have been increased by Rs2.33 to Rs55.78 per kg. For Khyber-Pakhtunkhwa, the prices rose by Rs1.55 to Rs58.55 per kg.
Meanwhile, rates for Balochistan and Potohar have been reduced by 13 paisa to Rs58.5 per kg.
Ogra had divided the country into four blocks based on gross calorific value. This resulted in CNG prices rising by Rs1.36 to Rs58.55 per kg at all pumps in Attock, Gujjar Khan, Islamabad, Karak, Bannu, Tank, Lakki Marwat and Dera Ismail Khan.
CNG Association welcomes decision
All Pakistan CNG Dealers Association Chairman Junaid Magda asserted that “input costs like electricity as well as procurement cost of CNG have been on the rise, negatively impacting the margins of CNG pump operators.” He said that the latest increase will help dealers maintain viability of businesses.
He also supported the changes in zones, saying that it would lend consistency to CNG prices and make it easier to weed out operators that may be charging different rates than those prescribed by Ogra.
However, people’s reaction to the latest price hike has been much more critical. “By increasing prices across the board, the government leaves no alternative for motorists,” said Fahad as he waited at a CNG pump in Karachi for a fill-up.
The announcement of the increase in CNG rates came less than a day after a massive increase of up to 13 per cent in prices of petroleum products including petrol, diesel and kerosene oil.
Experts contend that rising international fuel prices coupled with the government’s inability to provide further subsidies on fuel are the main reasons for the latest round of price hikes. Public sentiment has been against these measures and even coalition partners of the government have strongly criticised the fuel price increases.
Additional reporting by Mobin Nasir from Karachi
Published in The Express Tribune, April 2nd, 2011.
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