The Oil and Gas Regulatory Authority (Ogra) has proposed to revise the prices of Compressed Natural Gas (CNG) every six months, even after the government proposed to fix CNG prices at 80% parity with the price of petrol.
The proposal to fix CNG prices at 80% parity with price of petrol will result in CNG prices rising up to Rs27 per kg. An adjustment to the Gas Infrastructure Development Cess (GIDC) would be made to link the price of CNG with petrol.
At present, CNG prices are Rs61.64 per kg in Region-1, which includes Khyber-Pakhtunkhwa, Balochistan and the Potohar Region (Rawalpindi, Islamabad and Gujarkhan) and Rs54.16 per kg in Region-2, which comprises Sindh and Punjab (excluding the Potohar Region).These prices do not include the operating charges of CNG stations.
Sources told The Express Tribune that the current prices of CNG would surge to Rs 82.12 per kg after pegging them at 80% parity with petrol prices. By linking CNG prices to those of petrol, the government has been reviewing CNG prices first on a monthly basis, then fortnightly and weekly basis, in line with the revision in prices of petroleum products.
The petroleum ministry appeared to be framing out CNG policy guidelines without proper assessment. While commenting on the proposed CNG policy guidelines framed by the petroleum ministry, Ogra said that the government should revise prices of CNG after every six months. It said the government could take the average price of petrol of the state-owned Pakistan State Oil for a six-month period to determine the new price of CNG.
In the proposed policy guidelines, the petroleum ministry said that CNG prices will be linked to the distribution of other fuels like petrol and diesel, where margins are allowed to oil marketing companies (OMC) and petroleum dealers with the difference for value addition (compression) that occurs at CNG stations.
Ogra was also of the view that OMCs and petroleum dealers charge different margins and there was not clarity whether CNG dealers’ margins will be linked with the companies and dealers.
Presently, the margin of OMCs on petrol is Rs1.98 per litre, while the dealers’ margin is Rs2.37 per litre. OMCs margin on diesel stands at Rs1.76 per litre and dealers’ margin at Rs2.20 per litre.
Ogra also brought up the matter of the use of CNG in public transport only. It said that provinces were using different modes of transport and had different rules. The regulator pointed out that there should be identification in the type of public transport to allow the use of CNG.
Published in The Express Tribune, December 13th, 2012.
COMMENTS (11)
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@abdussamad,
are you assuming that "JAGEERDAARS" will add their "income tax" in "cost of goods sold"?? if not then how would it increase the food prices?? :S
System is to make you fear so you accept what is in "their" favour.
Hail Pakistani Corrupt System Once again.
@Guy Fawkes: So you want to increase taxes on food, which will have a huge impact on the poor, and use that money to subsidize fuel used by the rich? What a selfish proposition!
@Salah Nizami:
Indeed! If they left it to the market we would have both reasonable prices AND widespread availability of CNG. Instead they keep fixing prices which results in extreme situations.
Here is a novel idea: charge what it actually costs. In other words, let the markets decide the price. Why is the cost of gas for suppliers for home Rs. 7/ kilo, for industry 13/k and for CNG stations Rs. 56/k
Are home people getting a subsidy or are car owners paying through their nose
@Tabish Bilgrami, Wah! KUDOS to your suggestion.
Please charge CNG at 130 per KG but please please please save us from the traffic jams due to long queues!
People better start using donkeys and 'Tongas' again !!
please get rid of teh highlighted blurbs in between paragraphs or make them easier on the eyes
excuse me ?? what was supreme court verdict ?? i mean wasnt supreme court said that CNG prices cannot be linked with petrol as CNG produced domestically ? so price of CNG went down from 81 to 51 ?
why linking gas prices with petrol?? why doesn't government tax the agriculture sector and bring every politician into tax net so it gets enough funds to subsidize the petroleum price.
Hail Pakistani corrupted system.