Stand-off: No consensus yet on CNG prices

Meeting between OGRA, CNG industry remains inconclusive.


Our Correspondent December 11, 2012

ISLAMABAD:


The Oil and Gas Regulatory Authority (Ogra) and the association of compressed natural gas (CNG) dealers have failed to develop consensus on CNG prices, dashing hopes of an early resolution of the gas crisis and reopening of hundreds of closed filling stations across the country.


Ogra – the oil and gas industry regulator – and CNG station owners and dealers were holding negotiations following Supreme Court’s instructions to Ogra to consult all stakeholders before determining CNG prices.

On October 25, Ogra had reduced CNG prices by a whopping Rs30 per kg following an order of the Supreme Court in which it declared illegal the link between CNG and petrol prices. The court also declared illegal the operating cost and profit rate being charged on CNG sales.

On Tuesday, Ogra officials met with representatives of the All Pakistan CNG Association in Islamabad to discuss the cost of gas, but the meeting remained inconclusive and failed to reach any understanding on CNG prices as both sides remained glued to their stance. They will meet again on Thursday to push forward their talks.

Talking to The Express Tribune, Ogra spokesman said the CNG association expressed reservations about the gas price being charged by gas utilities and alleged that the utilities were overcharging.

The CNG

“We are taking all stakeholders on board as directed by the Supreme Court. The consultation process is continuing,” he said.

“It does not matter if the two sides could not reach a consensus. This was not a final round of talks over CNG pricing, the two sides are expected to reach an understanding in the next meeting.”

The upcoming meeting will be attended by high-ups of the Ministry of Petroleum and Natural Resources and representatives of Sui Northern Gas Pipelines Limited (SNGPL), Sui Southern Gas Company (SSGC) and the CNG association.

During Tuesday’s talks, the CNG association suggested an audit of filling stations to determine prices and prices should be assessed in light of the Supreme Court’s directives.

CNG Association Supreme Council Chairman Ghayas Paracha earlier announced that they would not accept any decision if it was taken without consulting them. He said the association did not agree with a summary of the petroleum ministry sent to the Cabinet Division, which called for parity between CNG and petrol prices.

The petroleum ministry wants to eliminate the CNG industry and is seeking approval of policy guidelines for the purpose.

Published in The Express Tribune, December 12th, 2012.

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