Likely rise in CNG price

Pakistan has been facing a gas shortage for the past several years due to declining local production of the commodity


June 20, 2021

CNG causes far less air and other kinds of environmental pollution than petrol and LPG and the former is cheaper than the latter two fuels. It is in view of these advantages that CNG was adopted as a fuel for vehicles in Pakistan in the early twenty-first century. Many vehicles in Pakistan and other countries were converted to CNG and it gave results in terms of cutting pollution because of its being an eco-friendly fuel.

However, Pakistan has been facing a gas shortage for the past several years due to declining local production of the commodity, so the authorities resorted to gas rationing in order to tide over the problem. Then the government began to import the relatively expensive liquefied natural gas (LNG), which the filling stations are using as CNG. This has come both as a boon and a bane. While it helped get over the increasing scarcity of gas, it also made the commodity expensive. Now the All Pakistan CNG Association claims that as a result of the levy of new taxes on LNG in the Punjab budget, the price of CNG would rise by Rs6-9 per kg in the province, and this might lead to the closure of many CNG filling stations, rendering thousands of workers jobless.

The association complains that nearly all sectors have been given relief in the provincial budget, but ironically only the CNG sector has been given a raw deal. It says that a lower petroleum levy is encouraging the use of petrol and diesel — the pollution-causing fuels — and another increase in CNG price would be disastrous. The association claims that CNG is the only sector which is purchasing LNG without any subsidy and discount so the CNG sector’s shutdown could jeopardise the supplies of LNG worth a huge amount of money. It is feared that the lower usage of CNG in transportation would push up the fares. Moreover, it would add to environmental pollution and increase the petroleum import bill.

Published in The Express Tribune, June 20h, 2021.

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