“The extraordinary hike of 31% in the tariff of natural gas will leave the CNG sector bankrupt and thousands jobless,” said APCNGA Central Chairman Iftikhar Ahmed.
He said it would hurt not only the masses and existing businesses using gas but it would also put future investment in jeopardy, which included construction of liquefied natural gas (LNG) terminals with the help of foreign investment. He said compressed natural gas (CNG) dealers in three provinces of Sindh, Balochistan and Khyber-Pakhtunkhwa had increased CNG prices by up to Rs22 per kg while the price in Punjab had been raised by just Rs3 per kg. “Punjab is using imported gas, which has attracted 5% customs duty in the budget that has translated into Rs3 per kg,” he elaborated.
CNG dealers oppose increase in gas tariff
The leader of the CNG sector said the industry had rejected the higher price of gas, which would increase the consumption of petrol that would erode the country’s foreign exchange reserves. Ahmed pointed out that the current government had increased the price of energy many times in the past 10 months, dealing a blow to the masses, industry and agriculture.
“Economic activities are going down with the passage of each day,” he said, adding that the private sector could only pay taxes and provide jobs when their businesses were running.
He said the budget proposals forwarded by the APCNGA were not accepted and “now we will inform the minister of petroleum and the minister of finance about our reservations to save the CNG sector from collapse”.
Earlier, in a notification issued on Sunday, the prices of CNG were increased by up to Rs22 in the three provinces. “Punjab will remain immune from the upward revision in the tariff of natural gas as CNG stations in that province are using imported re-gasified LNG,” it said.
The price of natural gas for the CNG sector has been increased from Rs980 per million British thermal units (mmbtu) to Rs1,283 per mmbtu, the highest in the past one decade, said APCNGA Central Leader Ghiyas Abdullah Paracha in the notification.
CNG price in Punjab goes up by Rs3 per kg
He said the formula for sales tax had also been changed, which would increase the cost of economical fuel in the range of Rs2.25 to Rs2.74 in different provinces. Paracha said the new gas prices were unacceptable, therefore, the government should resolve the issue through consultations with the APCNGA and other stakeholders.
“The decision will reduce the demand for gas, increase demand for petrol and add to the oil import bill as well as environmental pollution,” he said, adding that increased import of petrol would require foreign exchange, which would adversely impact the drive to save US dollars.
He pointed out that the decision was detrimental to the survival of the Rs450-billion CNG industry, which was providing jobs to millions while it would also increase transportation costs and fares, and threaten budgets of poor rickshaw and taxi drivers. “Closure of the CNG industry will not only hit investments and jobs but will also affect revenues of the government, therefore, it should be reviewed,” he argued.
Published in The Express Tribune, July 2nd, 2019.
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