CNG dealers blame govt for complicating price issue

Say people being misguided about their profit margins.

Our Correspondent December 03, 2012

ISLAMABAD: Dealers of compressed natural gas (CNG) have criticised the bureaucracy for deliberately complicating the price issue after a landmark price-reduction decision of the Supreme Court, in a bid to phase out the CNG industry.

“Government wants to deprive people of the economical fuel to reward some influential sectors and pave the way for more import of costly fossil fuel,” said Ghiyas Abdullah Paracha, Chairman Supreme Council of All Pakistan CNG Association, while speaking at a press conference here on Monday.

Paracha said though the Ministry of Petroleum and Natural Resources, Oil and Gas Regulatory Authority (Ogra), independent auditors and parliamentarians had accepted that the current retail price of CNG was not sustainable, the nation was being misguided that the CNG dealers were earning excessive profit margins.

He claimed that the CNG sector was using only 6% of gas produced in the country and asked the president and prime minister to take note of the plot that was hurting owners of 3.5 million vehicles running on CNG, operators and staff of 3,400 CNG outlets and millions of commuters.

He pointed out that the Supreme Court had also questioned the wellhead gas prices and called for a forensic audit, but no move was initiated.

the governent

Citing the wide difference in gas prices, Paracha said the government was buying gas at Rs18 and Rs850 per unit from different wells located in the same area and the difference was covered through cross-subsidy.

“Government is buying gas from Qadirpur field at $2.56 per million British thermal units (mmbtu) while it is paying $8.5 for gas from Kadanwari field, which merits a probe.”

Now, the energy ministry has initiated efforts to increase the gas price for the producers, which will put an additional burden of Rs122 billion on the people, he said.

Paracha dismissed decisions and proposals about additional taxes on CNG operators, barring vehicle owners from buying CNG, closing filling stations for two months in winter, cancellation of licences of stations using extra gas, reducing operational cost to zero and closing down 400 CNG stations.

Published in The Express Tribune, December 4th, 2012



Anon | 8 years ago | Reply

“Government is buying gas from Qadirpur field at $2.56 per million British thermal units (mmbtu) while it is paying $8.5 for gas from Kadanwari field, which merits a probe.”

Just to add to it, the gas from Qadirpur field (operated by PPL, KUFPEC and PKPEL) is natural gas reservior while the Kandanwari field (operated by ENI Pakistan) is a Shale gas reservior. The cost of extracting shale gas is usually minimum 200 ~ 300% higher than natural reservior.

ET: kindly get your facts straigh before publishing news. Also please don't try to twist the facts :p

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