CNG industry seeks withdrawal of infrastructure tax

Dealers are paying the cess in the range of Rs47 to Rs84 per mmbtu.

ISLAMABAD: Encouraged by National Assembly’s resolution against increase in oil prices, the compressed natural gas (CNG) dealers have asked the government to withdraw the infrastructure development cess — a type of tax — on CNG, as the industry is already paying high gas prices compared to other consumers.

The demand came after the NA adopted a resolution on Thursday, pressing the government to withdraw the recent increase in petroleum product prices that took effect from February 1.

“We also request the parliamentarians to take up the issue of rise in CNG prices following imposition of cess and that should be immediately withdrawn,” Abdullah Ghayas Paracha, Chairman of All Pakistan CNG Association told The Express Tribune.

The government in January imposed cess at the rate of Rs84.60 per million British thermal units (mmbtu) in Zone-I comprising Khyber-Pakhtunkhwa, Balochistan and Potohar region and Rs47.40 per mmbtu in Zone-II comprising Sindh and Punjab (excluding Potohar).

At present, the CNG industry is paying gas price of Rs699.20 per mmbtu in Zone-I and Rs736 per mmbtu in Zone-II, which are higher when compared with other consumers.

The commercial sector pays Rs600.19 per mmbtu, industry including captive power plants Rs507.86 per mmbtu, power sector (Wapda and KESC) and independent power plants Rs507.86 per mmbtu, cement industry Rs694.22 per mmbtu, old fertiliser plants Rs313.27 per mmbtu and new plants Rs60.67 per mmbtu. Bulk domestic consumers are paying Rs496.21 per mmbtu.

“Allegations of higher profits in the CNG sector are unjustified and the increase in gas prices by imposing the cess should be immediately withdrawn to provide relief to people,” Paracha said.

Published in The Express Tribune, February 4^th, 2012.