SC insists CNG prices should remain same until new formula prepared

SC orders respondents to prepare new formula which prioritises consumer's benefits, adjourns hearing till December 5.

ISLAMABAD: The Supreme Court, while hearing a case regarding CNG prices on Monday insisted that the price should remain the same – Rs54.16/kg for region II– and ruled that the new formula of basing CNG prices on the price of petrol prepared will have to prioritise consumer’s benefit, Express News reported.

The Oil and Gas Regulatory Authority (Ogra) on Saturday had proposed a hike in CNG prices of up to Rs13/kg to keep CNG stations operating in the country.

The Supreme Court said that all respondents in the case should sit together and come up with a new formula for pricing the CNG and adjourned the hearing till December 05, 2012.

In its orders issued on October 25, the Supreme Court directed CNG prices to be cut after declaring the mechanism of basing CNG prices on the price of petrol as illegal.

According to the break-up of the current CNG prices, the government’s tax share in Region-1 is Rs35.89 per kg, which breaks down into Rs11.57 per kg of cross subsidy, Rs7.77 per kg sales tax at a rate of 25%, Rs13.24 per kg for Gas Infrastructure Development Cess (GIDC) and a sales tax on GIDC at a rate of 25%, amounting to Rs3.31 per kg.