CNG sector floats $2.1 billion import bill saving plan

Insists if govt allows LNG import, it will provide significantly cheaper fuel

ISLAMABAD:

The compressed natural gas (CNG) industry on Tuesday unveiled a plan that could save $2.1 billion in import bill by providing significantly cheaper gas for vehicles provided the government facilitated the private sector in liquefied natural gas (LNG) import.

At present, government companies have monopoly over LNG import and distribution, though all necessary regulatory requirements are in place for the private sector.

Consumers have paid Rs16 billion in the past five years on account of capacity charges to Pakistan GasPort terminal that has been running on average at 70% capacity.

GasPort’s LNG terminal has handling capacity of 750 million cubic feet per day (mmcfd) whereas the government has allocated 600 mmcfd of capacity and the remaining capacity is lying idle.

“We can provide gas to CNG stations for public transport, which will be 53% cheaper compared to petrol and save around $2.1 billion in annual import bill,” said Ghiyas Abdullah Paracha, Group Leader All Pakistan CNG Association (APCNGA), at a media briefing.

He claimed that the cheaper gas would help reduce the circular debt that had crossed Rs2 trillion in the energy sector.

Besides the savings of billions, “a 50% reduction in public transport fares is also possible if the government allocates at least 50mmcfd capacity to the CNG industry until the commencement of LNG import by the private sector,” he said.

Paracha stressed that he wanted to present the plan to the government to put the country’s economy back on track, save foreign exchange reserves, provide relief for the general public with reduced transport fares, create job opportunities and minimise environmental pollution.

“Revival and expansion of the CNG sector can generate thousands of new job opportunities while the use of CNG as an alternative fuel in motor vehicles is equivalent to having an environmental benefit of 152.63 million trees per annum,” he added.

He pointed out that CNG was still less expensive than the prevailing petrol price while it would be further cheaper if the private sector was allowed LNG import for the CNG filling stations.

According to Paracha, at present CNG is 10.4% cheaper than gasoline, though the government is providing subsidy on petrol and has reduced the petroleum levy and general sales tax to zero.

“If the government allows the private sector to import LNG, then it can import 300 mmcfd, which will make CNG 18.6% cheaper than gasoline,” he claimed.

“We assure the government that a positive change can be brought in no time if the private sector is provided timely support and cooperation.”

Sharing details of CNG stations established across the country with an investment of Rs350 billion, APCNGA Central Chairman Samir Gulzar told the media that around 2,300 CNG stations had been established, of which 1,100 were located in Punjab, 600 in Sindh and 575 in Balochistan.

Published in The Express Tribune, June 8^th, 2022.

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