Break in deadlock?: CNG stations may be allowed to provision for operating costs

Committee to table CNG policy guidelines before the ECC today.

ISLAMABAD: A sub-body of the Economic Coordination Committee (ECC) has turned down a plan calling for linking CNG prices to 80 per cent parity of petrol and restricting its use to public transport only.

However, the subcommittee, which met on Monday with Law Minister Farooq H Naek in the chair, agreed on the CNG pricing guidelines which will be tabled in the meeting of the supervisory body to be held on Tuesday (today).

“The linkage of CNG price to 80% parity of petrol and restricting its use to public transport only, as proposed by the petroleum ministry, are broader issues which need to be addressed later,” officials quoted the law minister as saying. He said that primary task before the panel was a resolution to the CNG prices issue, and enabling CNG stations to resume operations so that the transport problems of the masses could be addressed.

After its review of the situation, the subcommittee has agreed to allow CNG station owners to factor in their operating costs in the CNG price. Sources said that the ECC body is considering a plan allowing Rs 7.22 per kg compression cost and Rs 5.42 per kg operating cost to CNG station owners. The plan, which will be tabled in the meeting scheduled for Tuesday (today), will decrease the profit of CNG station owners from the current Rs 6.22 to Rs 3.42 per unit.

“The ECC body has agreed that CNG station owners should be allowed to recover amounts from end consumers on account of four heads: human resource (HR), lubricants, fee and maintenance [costs],” sources revealed. They added that the panel will seek approval for CNG policy guidelines from the ECC on this account. However, sources said that the exact amount of chargeable operating costs would be determined later by the Oil and Gas Regulatory Authority (Ogra).

Officials said that the ECC body is considering a plan allowing Rs7.22 per kg compression cost and Rs5.42 per kg operating cost to CNG station owners. The plan, which will be tabled in the meeting scheduled for Tuesday (today), will decrease the profit of CNG station owners from the current Rs6.22 to Rs3.42 per unit.

The All Pakistan CNG Association (APCNGA) demanded that they should be allowed to recover costs under seven heads from end consumers as operating costs of their business. These include the costs incurred on human resources, oil and lubricants, civil work, rents, depreciation costs, maintenance and others.

The Federation of Pakistan Chamber of Commerce and Industry has supported the CNG industry’s demand. However, the Consumer Rights Commission of Pakistan had opposed any increase in CNG prices on account of operating and compression costs. It had demanded that existing CNG prices be maintained in order to provide some relief to consumers.

Officials also said that Adviser to the Prime Minister on Petroleum Dr Asim Hussain also used the platform to continue his criticism of the role of Ogra. He said that the rate of the Gas Infrastructure Development Cess (GIDC) on CNG should be raised, otherwise, its consumption would increase, exacerbating the gas crisis currently plaguing the country.

However, the law minister said that the people’s sufferings were more important, and the first priority therefore should be the resolution of CNG prices.

The body will meet again on Tuesday (today) before the ECC and table a draft of CNG policy guidelines before the CNG industry and other stakeholders.