Ensuring compliance: Govt to shut down CNG stations defying price cut
A day after Compressed Natural Gas (CNG) prices were slashed by over Rs30 per kg following a Supreme Court order, the government warned those stations that either refused to lower prices or chose to remain closed that their licences would be cancelled.
Speaking to the media on Friday, Adviser to the Prime Minister on Petroleum Dr Asim Hussain said that a list was being compiled of those stations that were closed after CNG prices were slashed.
Welcoming the apex court’s orders, Hussain urged all provincial governments to ensure immediate implementation of the directions. The Oil and Gas Regulatory Authority (Ogra) has sent out notifications of the reduced prices to the chief secretaries of all provinces as well as the managing directors of the two major gas companies (Sui Southern Gas Limited and Sui Northern Gas Limited) to ensure the implementation of new rates.
“We have also instructed the gas companies to cut gas connections of stations selling gas on old prices,” Ogra Chairman Saeed Ahmed Khan told The Express Tribune, adding that the regulator had warned owners of CNG stations that their licences would be cancelled if the price reduction was not implemented.
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,” Khan added.
The Supreme Court on Thursday declared “illegal” the existing formula of linking the review of CNG prices with oil prices. The populist judgment had drastic effects – both immediate and long term. Shortly after the announcement, Ogra issued a notification reducing CNG prices by a whopping 33%.
Officials also told the court that an entirely new mechanism was being worked out with stakeholders, and the existing arrangement, in place since 2008, would be scrapped immediately. The new arrangement would factor in other issues such as gas demand, etc.
New mechanism
Ogra will present a new formula of CNG prices before the Supreme Court on November 1, the Ogra chairman told The Express Tribune on Friday. A public hearing to form a 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 the 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),” Khan said.
Meanwhile, All Pakistan CNG Association Chairman, Ghias Paracha, has appealed to CNG station owners to sell gas on the reduced prices.
“CNG sale as per decision of Supreme Court will continue during Eid. We will approach Ogra on October 30 for hearing and will also give our opinion on the matter to the Supreme Court on November 1,” said Paracha.
Published in The Express Tribune, October 27th, 2012.
COMMENTS (5)
Comments are moderated and generally will be posted if they are on-topic and not abusive.
For more information, please see our Comments FAQ
visit PSO,BYCO.SHELL PAKISTAN AND CALTEX web page you cant find CNG price on their websites ...(
What business does an unelected judge have in dictating terms to private business?
@ Irfan Ansari. Due to acute shortage of gas supply, the government already wanted to shut down CNG stations. Supreme Court's decision has helped government because it has made impossible for CNG stations owners to continue with their business. No CNG this winter. If you find it at SC rates somewhere, please let us know.
The government should use iron hand with those CNG Station who are not following the directives of Supreme Court of Pakistan.
Long live SC and CJ!