CNG price to be increased to 60% of petrol

Government, filling station owners agree on 12 per cent increase in prices.

KARACHI:

The Ministry of Petroleum and Natural Resources and All Pakistan CNG Association (APCNGA) have agreed to increase gas price for CNG filling stations to 60 per cent of petrol price, which means prices will increase by 12 per cent from the current ratio of 48 per cent of petrol price, a government official said.

Earlier, the ministry had proposed in a summary sent to Prime Minister Yousaf Raza Gilani to take CNG price to 65 per cent of petrol price. However, in negotiations between Petroleum Minister Dr Asim Hussain and CNG Association’s office-bearers, they agreed on a price formula which would keep a difference of 40 per cent between prices of CNG and petrol.

In a press conference on Monday, the CNG Association claimed that the government had agreed to withdraw the proposed increase in gas prices for CNG stations. It also said the petroleum minister had accepted the request to reduce gas outages from two to one day in Sindh.

However, the petroleum minister said gas price for CNG stations would be kept at 60 per cent of petrol. “I have agreed to bring the price of CNG at 60 per cent of petrol,” Hussain told The Express Tribune and added the government would reconsider revising the gas load management plan for CNG stations keeping in view gas availability.

CNG Association’s Supreme Council Chairman Ghayas Paracha said the petroleum minister had agreed to maintain the existing CNG price and only a nominal increase would be made following the decision of Oil and Gas Regulatory Authority (Ogra).

Paracha said the CNG industry had invested Rs31 billion and the industry could collapse due to a single decision on the increase in gas price and outages. “The government is expected to receive 125 million cubic feet per day (mmcfd) of gas from Kunnar-Pasakhi field, which will be distributed among industrial, CNG and fertiliser sectors,” he said, adding if CNG outlets received 35 to 40 mmcfd, there would be no outages.

He said the government had given 100 mmcfd to Engro’s fertiliser plant in Sindh which caused problems for other sectors, adding independent power plants (IPPs) and textile industries were also lobbying to get more gas at the cost of CNG industry.

He set the deadline of July 11 for resolving the issues and in case of failure the association would launch a protest campaign across the country.

Published in The Express Tribune, July 5^th, 2011.