Row ends: CNG prices to be fixed at 60% of petrol

CNG association, petroleum ministry strike a deal to lower prices.

ISLAMABAD: The row between the petroleum ministry and the All Pakistan CNG Association (APCNGA) ended on Thursday after the two parties struck a deal on a new pricing formula and a commitment by the ministry to not impose any additional gas infrastructure development cess (GIDC).

The petroleum ministry also agreed to reduce load shedding for the CNG sector.

The agreement between the association and the ministry will stand for a year, starting June 16, said Chairman APCNGA Ghyas Paracha at a press conference on Thursday.

At 60% of petrol

According to the agreement, retail prices for CNG, including the GIDC, will be fixed at 60% of retail petrol prices. The parity will be maintained in pursuance of the existing CNG price computation formula approved by the Oil and Gas Regulatory Authority (Ogra). No additional cess will be levied over and above the agreed parity. Meanwhile, load shedding for CNG will be reduced by 8 hours, effective June 16. Total load shedding will stand at 2 days and 16 hours per week.

Paracha said that gas utilities had admitted in the meeting that the CNG sector was using 322 million cubic feet of gas per day (mmcfd). That the CNG sector is getting 500 mmcfd of gas was just propaganda by some lobbies, he said.

He added that the petroleum ministry assured the association that it would arrange for participation of their representatives in meetings of the parliamentary committees on energy. “It has been acknowledged during the meeting that it will not be possible to meet the shortage of petrol in the country if CNG stations are closed,” he said.

Paracha said the CNG sector was paying a rate of Rs890 per mmbtu of gas, which is more than what other consumers are paying. “Therefore it is propaganda that the CNG sector is receiving a subsidy of Rs50 billion; in fact, other sectors are receiving subsidies,” he said.

Published in The Express Tribune, June 15^th, 2012.