‘New policy’: Govt proposes CNG price at 80% parity of petrol
Despite Supreme Court orders, the government has proposed to fix the price of Compressed Natural Gas (CNG) at 80% parity with the price of petrol.
Unveiling a new CNG policy before the Cabinet, the petroleum ministry suggested enhancing the rate of Gas Infrastructure Development Cess (GIDC) to link the price of CNG with petrol – a move that may trigger another controversy since the Supreme Court had expressed strong reservations over linking the prices of CNG and petrol.
The new ‘policy guideline’ for the CNG sector also proposed a complete ban on the use of CNG in private vehicles, restricting it only to public transport in order to encourage the use of cheap and clean transport fuel.
According to the document submitted to the Cabinet, the petroleum ministry also proposed giving CNG station dealers margins of the rate Oil Marketing Companies (OMCs) and petroleum dealers use for the sale of petrol and diesel.
In the new pricing formula submitted to the petroleum ministry, Ogra had recommended value addition cost of Rs5.46 per kg and operational cost of Rs7.90 per kg.
The petroleum ministry has also proposed a CNG pricing formula, which includes the cost of gas as selling price for the CNG sector, value-added cost for compression, and a margin equal to the sum of margins of OMCs and dealers for petrol and diesel as approved by the federal government. The formula also comprises of the Gas Infrastructure Development Cess and the General Sales Tax (GST).
According to the petroleum ministry, the value added cost will be determined by Ogra through a process of public hearings and forensic audit of CNG stations. In order to remove the present distortion in the price of CNG and other fuels, it will be ensured that the price of CNG is not less than 80% of the price of petrol, the document stated.
Furthermore, it was decided that the current ban on the import of CNG kits and cylinders would continue until further notice. In the course of time, all CNG stations will be incentivized to convert to LPG. The ban on the setting up of new CNG stations will also continue till further notice.
According to the petroleum ministry, the consumption of gas for CNG has witnessed substantial growth in Pakistan, particularly in the past six to seven years. However, much of this growth occurred at a time when the supply of gas did not witness any significant increase. Accordingly, the growth is met by denying gas to other critical sectors of the economy, most notably the power and fertiliser sectors.
At present, the CNG sector’s gas demand is nearly 16% (437 mmcfd) of the system pipeline gas (2,796 mmcfd), causing an immense burden on the country’s limited energy resources.
Published in The Express Tribune, December 11th, 2012.
COMMENTS (15)
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I have a car who runs on Petrol and i love it. Whenever i want and wherever i want i can have petrol in my car unlike CNG. My time is more important than standing in long line to save few bucks.
Bottom line: if you can afford million rupees car, you for sure can spend few bucks extra on petrol.
See people having BMW, Audi and other precious cars waiting in CNG line to save a few bucks, really make me laugh.
why not govt reducing Petrol prices?. why CNG is on target? what government receiving from it?. a huge amount is going in the pockets of CNG pump owners. before the Chief justices intervene the owner were getting Rs.32 per kg. even now they getting Rs.11 per kg profit. but they are not happy and making issues for customers. if govt want make it equal to petrol price who be beneficial? no one but industrialist. why they change their industries into the gas? therefore they go back on early system what ever it was and allow CNG for vehicles and kitchen use.
LPG is not a safe option at all. All the cars that we hear in the news that usually burst out, were on LPG cylinders instead of CNG because LPG its in liquid form and if it catches fire, the whole car bursts into flames. .... bad investment it is!!!!!! Its better people spend on petroleum and be safe rather then convert their cars to LPG. people !!! please do some research before you even think about this stupid option.
Great........... At least this will clear the stupid traffic jams all over the city due to looooong queues
"...restricting it only to public transport in order to encourage the use of cheap and clean transport fuel." Is govt. thinking that its transport system is one of the best?
Lets Re-Paint cars to Black and Yellow
@ZA: Those are actually four words.
i think govt is talking sense. Supreme court should stop interfering in such matters. Supreme courts order paralyzed the whole system for a month
Everyone is going to start buying taxis to save on Fuel!
Very Good Idea "new ‘policy guideline’ for the CNG sector also proposed a complete ban on the use of CNG in private vehicles, restricting it only to public transport"
This is quite fair, we should have uniform fuel prices. We need gas first for cooking than to cars. I am with govt on that issue.
One Word ... Ban CNG Improve Economy
Another blow.