The government has reduced duties on import of liquefied petroleum gas equipment to 10%, as the petroleum ministry pushes to gradually phase out CNG stations and promote the setting up of LPG stations in Pakistan.
The decision was taken by the Economic Coordination Committee of the Cabinet, headed by Finance Minister Dr Abdul Hafeez Shaikh. Any LPG equipment with duties of more than 10% would be reduced, while duties already below 10 % will remain the same, according to the finance ministry.
Taxes on the import of LPG cylinders and kits include general sales tax, withholding tax and federal excise duty.
The equipment include LPG cylinders, LPG pumps, control panel, LPG dispensers and LPG vehicle conversion kits, from duties and taxes in order to expand the LPG market.
The strong lobby of LPG, backed by the Petroleum Ministry, is trying to sideline the CNG industry to have a larger market share. The ECC deferred another summary, seeking to lift a ban on the import of CNG cylinders and conversion Kits. The ECC had imposed the ban in the wake of increasing shortage of the natural gas, as CNG consumption has increased in country to almost 15% of the total production.
Foreign investors dealing in CNG cylinders and kits and car manufacturers have been asking the government to lift the ban on import of cylinders and kits but the government has so far refused to budge.
The ECC also decided in principle to allow fertilizer plants to directly negotiate with gas producers, according to a Finance Ministry official.
Since all existing gas producing fields have already been allocated either directly to consumers or to gas utility companies, it would not be possible to allocate gas from such fields, the petroleum secretary said in the meeting.
Published in The Express Tribune, August 17th, 2012.