New CNG prices not final: Asim Hussain
He said the Supreme Court has asked the Oil and Gas Regulatory Authority (Ogra) to determine prices by November 1, 2012, and the authority will have a hearing on Tuesday for this purpose.
Responding to a question, Hussain said the government will plead the apex court against de-linking of CNG-petrol parity as the country cannot afford to use gas as a cheaper fuel in the face of ever-increasing demand.
Speaking about the reaction of the CNG station owners‚ the advisor said that they were enjoying huge profits but now the margin will have to be reduced by the OGRA. He said public will benefit from this decision.
He asked CNG stations to not create difficulties for consumers and stay open during Eid holidays. He said gas companies have been instructed to disconnect supply to stations that fail to supply the public with CNG.
Hussain further said that the government has taken two initiatives to discourage misuse of gas as a cheaper fuel. No new licenses for CNG stations have been issued nor earlier licenses have been renewed.
Replying to question, the adviser said considerable progress has been made towards import of LNG but it would not be a cheap source.
Old prices, new prices
The Ogra has sent a notification of the reduced prices to the chief secretaries and managing directors of Sui Sothern Gas Limited and Sui Northern Gas Limited, to ensure effective implementation of the new rates.
“We have also instructed the companies to cut gas connections of the stations selling CNG on old prices,” Chairman Ogra Saeed Khan told The Express Tribune, adding that they warned owners of CNG stations to face an immediate ‘cancellation of license’ if they did not reduce prices as per the notification.
The authority also formed monitoring teams to identify CNG stations selling gas on old prices.
“As per our notification, all chief secretaries and gas companies are bound to keep us informed if CNG associations are not complying with the new rates so that we can initiate speedy action against them,” Khan said.
Chairman All Pakistan CNG Association Ghias Paracha has also appealed to CNG station owners to sell the fuel at the new price.
He informed media persons via text message that, “CNG sale as per the decision of Supreme Court will continue during Eid. We will approach Ogra on October 30 for the hearing and will also give our opinion on the matter to the Supreme Court on November 1.”
Supreme Court’s verdict
The Supreme Court on Thursday declared “illegal” the existing formula of linking the review of CNG prices with oil prices. The populist judgement had drastic effects – both immediate and longer term.
Shortly after the announcement, the Ogra issued a notification reducing CNG prices by over a whopping Rs30 – a 33% slash.
Officials told the court that a new mechanism was being crafted with relevant stakeholders. They added that the existing arrangement, in place since 2008, will be scrapped immediately. The new arrangement would factor in other issues such as gas demand, etc.
Chairman Ogra told The Express Tribune on Friday that the regulating authority will present a new formula of CNG prices before the Supreme Court on November 1. A public hearing to form new formula is scheduled on October 30 in which all stakeholders including owners of CNG stations, officials of the ministry of petroleum and finance division and representatives of chambers of commerce will also present their opinion.
“We will then formulate a new formula of CNG prices in light of opinion of public hearing and will present it before the court next day (November 1),” he said.
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a new formula that will bring back the old prices