Time is up: Government to wipe out CNG sector gradually

Published: July 31, 2012
A total 2.74 million vehicles are running on CNG fuel in Pakistan which accounts for almost two-thirds of cars and small commercial vehicles. PHOTO: FILE

A total 2.74 million vehicles are running on CNG fuel in Pakistan which accounts for almost two-thirds of cars and small commercial vehicles. PHOTO: FILE


Minister for Petroleum Dr Asim Hussain, while terming the compressed natural gas (CNG) promotion policy by the previous government as a false step, has aimed to phase-out the CNG sector gradually throughout Pakistan in coming years to save the industrial and domestic sector from gas curtailments in future.

“Pakistan Peoples Party government has evolved a policy to diminish the CNG sector by not issuing new licenses and not renewing contracts of operational CNG stations”, said Hussain in a press briefing. Those CNG stations whose 15-year licences mature in the future will not be renewed as we believe that the CNG sector has destroyed other sectors, he said. Interestingly Hussain, who blames previous government for CNG promotion, held an unofficial meeting with the Deputy Prime Minister Chaudhry Pervez Elahi, a strong supporter of promoting CNG during his previous tenure, before meeting journalists for the briefing.

CNG is a cheap fuel which might be good for individuals, but not for the overall economy, Punjab is consuming 320 millions of cubic feet per day (mmcfd) of gas in the shape of CNG, whereas Sindh is consuming 140 mmcfd, he said. Pakistan’s total gas requirement is 8 billion cubic feet (bcf), whereas it only produces 4 bcf, fulfilling the deficit through imports, the shortfall will be covered by importing liquefied natural gas (LNG) in coming years.

Earlier, the Oil and Gas Regulatory Authority (Ogra) decided to give permission to Pakistan State Oil (PSO) for setting up 26 liquefied petroleum gas (LPG) filling stations at its retail outlets across the country, officials say. Overall, the government is targeting to set up 100 LPG stations at retail outlets of PSO, in a bid to gradually phase out CNG stations over the next two years as per plan announced by the adviser to prime minister on petroleum and natural resources.

“The people of Pakistan will have to bear the gas shortage for another couple of years, after which things would start to normalise, Hussain said. The shortage exists mainly due to uneven gas exploration policy, he said.

Hussain, however, said that the government will manage to import LNG this winter to provide adequate gas to the industrial sector. “We do not want to destroy any of our industry due to gas shortages and are working to streamline the system”, he said. “We are also finalising a policy to save our fertiliser sector by providing them 10% of gas directly from gas producers, so the burden on the network of gas distribution companies eases, he said. Currently only three sectors, domestic, CNG and industrial sector have been provided gas, he said.

Talking about the Iran-Pakistan pipeline, Hussain said that the pipeline is 100 kilometres away from Pakistan’s border and the perception that Iran has laid the pipeline and Pakistan is reluctant is unfair. He suggested that petroleum prices should be revised weekly similar to the international markets where the mechanism works on a daily basis.

“However, in Pakistan we cannot afford to fluctuate the energy prices daily, but it should be recalculated on a weekly basis instead of every 15 days”, Hussain said.

Talking about the increased usage of gas generators in posh areas, Hussain said that we are framing a policy in this regard; however we might not implement it till the crisis persists as these generators provide relief to the citizens during the load-shedding hours. However he said that soon we will charge 25% extra on bills for those who use the generators of more than 500 kilo-volt-amperes.

Pakistan is the largest user of CNG in the world, overtaking Iran, Argentina and Brazil in the number of vehicles using gas as fuel, replacing more polluting fuels, according to the economic survey 2010-11. A total 2.74 million vehicles are running on CNG fuel in Pakistan which accounts for almost two-thirds of cars and small commercial vehicles, according to the International Association for Natural Gas Vehicles. The country also holds the record for most number of CNG stations.

Published in The Express Tribune, July 31st, 2012.

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Reader Comments (7)

  • just_someone
    Jul 31, 2012 - 1:20AM

    what a huge waste of resources in the last few years of all the setup of cng stations and the kits that people installed in their cars.
    the government, while converting to lpg, should fix the real reason for this problem, the last of exploration of natural gas in pakistan. great advancements in the US (albeit some might not be environmentally friendly) has resulted in natural gas prices plummeting but in pakistan the fact that all exploration is under government control, their mistakes are costly a poor nations tens of billions in lost economic activity over the last few years and at least a few more to come.
    we need to sell our commercial ventures, let private hands invest and we would have never had this problem to begin with. commercial companies should not be run by ministers and state appointed and politically motivated people. they should be run by experienced and professional management…


  • Asif khokher
    Jul 31, 2012 - 12:41PM

    LPG lobby has got an opportunity to align with the rulers to completely wipe out the CNG industry. There is no doubt that there is shortage of Natural Gas, however, this very Lobby has been successful in last four years to maneuver this in their favor with the help of rulers. IPI gas pipeline project was deliberately delayed for two years, other wise production would have started by end of this year 2012.

    These rulers have put future of this country at stake for their interests. Just for few vested interests, Billions of investments in the CNG sector in shape of CNG Stations and CNG Kits in the vehicle will be lost in the next few years. No one is taking this into account. Whether policy of starting CNG stations during late 90s was correct or wrong, however, now Billions should not be wasted.

    This policy is driving us to a stage where domestic users will also move towards LPG. Getting new domestic connections are becoming hard without bribe. If majority of the domestic users move towards LPG then this would be very unfortunate because there is good Transmission & Distribution Networks exists managed by SNGPL and SSGCL, eventually these corporation will also loose their worth.

    Better solution is Mix Basket of Energy. Introduction of LPG may be continued, however, an aggressive push should be given to LNG (Liquified Natural Gas) sector, which would help to utilize the existing investments for utilization of the Natural Gas. IPI Gas Pipline project must be completed according to new schedule delivery in 2014/2015.

    This is unfortunate that there exists no policy for the Energy Mix for next 20 years in Pakistan. This should be defined and be available to every stake holder for better management & utilization of the available resources.


  • Disaster Stopped
    Jul 31, 2012 - 12:49PM

    Excellent job and full marks to PPP government for this if just this. This was a curse from Musharraf era and Musharraf personally benefited from these allotments and is enjoying his illicit gains in Dubai and UK while our country suffered from gas shortages.

    Think about it, people who can fill CNG are car owners who could afford petrol anyway! So only they benefited with little price differential while homes and factories ran out of gas supply. With Mushharraf stupid and greedy actions, people would be left with cars but out of jobs and heat/cooking fuel at home!


  • Prabhjyot Singh Madan
    Jul 31, 2012 - 1:22PM

    Good job, finally by the ppp govt. Full marks to them.


  • syed imran
    Jul 31, 2012 - 1:29PM

    This will be a very wise step in right direction as its a huge waste of precious resource as well as highly injurious fuel for car engines which results in wasteful expenditures on vehicle maintenance


  • Ahmed
    Jul 31, 2012 - 2:25PM

    Be straight Dr. Asim. You are looking for new business opportunities for your mates to get billions from poor. Good Show.


  • Nasir Mahmood
    Jul 31, 2012 - 2:34PM

    Minister Petroleum is acting like a surgeon at the Ziauddin Hospital. Who will regulate the LPG prices. OGRA recently could not implement its orders and during the last three days Rs. 30 per kg price enhanced.


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