OGRA suggestion: Biannual CNG price revision proposed
Proposal to fix CNG prices at 80% parity with price of petrol will result in CNG prices rising up to Rs27 per kg.
ISLAMABAD:
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.
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.