OGRA works out Rs12 increase in CNG prices

Operating and compression cost included in new price, margin slashed.

ISLAMABAD: The Oil and Gas Regulatory Authority (Ogra) has worked out an increase of around Rs12 per kg in prices of compressed natural gas (CNG) after consulting stakeholders in line with directives of the Supreme Court.

According to an Ogra official, the price increase has been calculated on the basis of existing formula and is subject to approval of new guidelines. “If the government gives different guidelines, the prices can vary,” he said.

These issues were discussed in a meeting of Ogra held here on Thursday.

In the existing price of CNG, the operating and compression cost borne by CNG filling stations is not included.

The official said Ogra estimated the operating cost at Rs7.09 per kg and compression cost at Rs7.21 per kg. However, profit of CNG stations has been slashed to Rs3.42 per kg from existing Rs6.22.

In its policy guidelines submitted to the cabinet, the petroleum ministry has proposed inclusion of compression and operating costs of dealers in calculating prices of CNG. It also underlined the need for allowing CNG dealers to charge a margin, just like petroleum dealers and oil marketing companies did.

If Ogra’s estimate is accepted, the price of CNG will rise by Rs12.50 per kg in region-I comprising Khyber-Pakhtunkhwa, Balochistan and Potohar region and increase by Rs11.90 per kg in region-II that covers Sindh and Balochistan.

At present, CNG prices stand at Rs61.64 per kg in region-I and Rs54.16 per kg in region-II. If agreed, the new price will be Rs74.14 per kg and Rs66.06 per kg in region-I and region-II respectively.

The price revision may address the severe shortage of CNG being faced by consumers for more than a month due to a dispute between bureaucracy and CNG station owners over prices.

Talking to the media, Ogra vice chairman said though an initial working paper for determining prices of CNG had been prepared, after detailed consultation the authority worked out an increase of Rs12.50 per kg and Rs11.90 per kg.

Apex CNG body’s chairman Ghayas Paracha claimed that CNG dealers convinced Ogra in the meeting that gas utilities were fleecing the CNG stations.

Published in The Express Tribune, December 14^th, 2012.