CNG shutdown hikes fuel cost
Consumers of compressed natural gas (CNG) in Punjab will be forced to use expensive fuel due to supply disruption and the government will also have to import more petroleum products worth millions of dollars.
It is estimated that with the closure of CNG stations, about one million users of the fuel will have to buy about 15 million litres of petrol and diesel daily in their vehicles. This will not only drastically increase the financial burden on the consumers but also environmental pollution.
The government has suspended gas supply to the CNG sector reportedly because of lack of timely import of LNG. Commencement of unscheduled repair work at an LNG terminal has added to the problem.
CNG is used in about one million vehicles across Punjab, including most of the public transport, because it is Rs10 to Rs12 per litre cheaper than petrol and diesel.
The transporters may also increase the fares if they have to run their vehicles on petroleum, thus affecting the citizens.
Rising demand for petroleum products will force the government to import oil worth millions of dollars, which will have a negative impact on the national economy.
All Pakistan CNG Association chairman Khalid Latif complained while speaking to The Express Tribune that gas supply to the sector had been cut off suddenly.
He said a large number of people were already unemployed, sales tax on LNG imports for the CNG sector had been increased from 5% to 17% and 5% customs duty had also been imposed. The levies had made CNG expensive and jeopardised the survival of the business, the leader of CNG station owners added. He said the decision to suspend the gas supply should be withdrawn.
He alleged that administrative weakness and wrong decisions had caused the gas crisis.
The CNG sector had been facing obstacles in importing gas itself for years, he claimed.
Latif said the wrong time had been chosen for repair work at gas fields and the LNG terminal.
The government was neither importing gas in time nor allowing the CNG sector to do so, he said and added that the crisis would continue as long as the sector was not allowed to import its own gas.
Leaders of the gas station owners criticised the Sui gas companies and claimed that if they were allowed to import the fuel, it would help end power load-shedding and the government would get an annual benefit of billions of rupees. However, the permission was not acceptable to some bureaucrats, they alleged.
They said imported gas was being used by about 1,500 CNG stations in Punjab and they had nothing to do with the reduction in domestic production, so here was no justification for cutting off their supply.
Khalid Latif said Rs450 billion had been invested in the CNG sector but its future appeared bleak.
In Lahore alone, more than 200 CNG stations had been shut down because of various problems, while the figure for the whole province was 800, he pointed out.
He said the sector had provided employment to millions of people and the government should take steps to rehabilitate it by revoking the decision to impose additional taxes to ensure the availability of the environment friendly and cheap fuel to the people so that pollution and fares remain in check.
A transporter, Ilyas Ghuman, said that when CNG would not be available, the owners would use petrol and diesel and the financial burden could only be met by increasing the fares within the city by Rs3 or Rs4.
Replying to a question, Amir Mubeen and Zia, who travel by public transport in the provincial capital, said they had paid a fare of Rs20 a day earlier but had been charged Rs30 on Tuesday. The bus owner said it was running on petrol and not CNG. According to Petroleum Dealers Association secretary Khawaja Atif, about 1.2 million litres of petrol and diesel are used daily in Lahore. The closure of CNG stations increases the demand by about 300,000 litres.
Most public transport in Lahore runs on the Multan and Ferozepur roads and most of these vehicles use CNG.
Published in The Express Tribune, June 30th, 2021.