Compromise on CNG pricing formula may be reached soon

Petroleum ministry agrees to provide policy guidelines within a few days.

ISLAMABAD: The controversy on CNG prices may settle down soon, as the petroleum ministry agreed on Friday to provide policy guidelines within a couple of days; looking to normalise the crisis-like situation arising out of the nationwide shutdown of CNG stations.

According to reports, Adviser to the Prime Minister on Petroleum and Natural Resources Dr Asim Hussain had earlier rejected a price determined by the Oil and Gas Regulatory Authority (Ogra) after receiving the summary on Thursday. In its decision, sent to the federal government, the regulator had determined an increase of Rs10.56 per kilogramme (kg) in the price of CNG in Region 1, and Rs9.60 per kg in Region 2.

Sources said that legal experts had suggested to Ogra that it could still notify the prices of CNG even if the petroleum ministry did not provide policy guidelines. They were of the view that the Ogra Ordinance empowered the regulator to notify prices; as it had on October 25, following the Supreme Court’s decision on the price fixing issue.

An official said that Ogra, exercising powers conferred to it under Rule 13 of the CNG Rules 1992, and in light of the views, arguments, suggestions and feedback received from all stakeholders and participants through the consultation process, had decided the new price. “It is also under this rule that we have sought advice from the federal government,” the Ogra official said.

In a statement issued here, Ogra said that it had formulated a new CNG price formula and forwarded it to the Ministry of Petroleum and Natural Resources so that the latter could issue necessary policy guidelines to Ogra, in line with the Ogra Ordinance/Rules, enabling Ogra to comply with the Supreme Court’s decision before December 5, 2012.



Besides meeting all the challenges, the regulator claimed that it has determined and finalised the CNG consumer price formula taking into account the urgency of the issue, and in pursuance of the Supreme Court’s order. Ogra said it has completed the process of consultation with stakeholders, wherein input was obtained from professionals, technocrats, legal experts, consumers, CNG associations, chambers of commerce and government departments, including the finance and petroleum ministries, in various meetings and public hearings held in Lahore, Karachi and Islamabad.

For further deliberation, Ogra has also planned a detailed audit of 300 CNG stations all over the country within the next few months.

Ogra, in its statement, reiterated that its role in the energy sector is highly important and has been performed not only to encourage and offer investment, but also to protect consumers’ interest while maintaining transparency and fairness.

“Therefore the criticism/perception created in the media and press by different forums is to defame and undermine the role of Ogra as a regulator, and is hence totally misleading and unfair,” reads the statement. “Ogra is performing its assigned duties and functions in a fair and transparent manner so as to fulfil the requirements of the law.”

Published in The Express Tribune, December 1^st, 2012.