Averting crisis: CNG industry turns to LNG to run filling stations

Asks government to either provide or allow it to import LNG.

ISLAMABAD:

The compressed natural gas industry has asked the government to allow it to purchase liquefied natural gas, which could be imported either by the government or the industry itself, in a desperate bid to continue to run its outlets and save Rs450 billion worth of investment, which is at stake because of persistent gas outages.

The proposal is part of efforts to offset the impact of gas shortages, save millions of jobs and protect commuters from high fares, industry players say.

The All Pakistan CNG Association has suggested doing away with natural gas and buying 400 million cubic feet of LNG per day (mmcfd) to run 3,600 outlets so that the industry could cope with the challenges, according to a letter sent by the body to Petroleum Minister Shahid Khaqan Abbasi.

They are willing to stop consuming natural gas produced in the country if the government supports them in purchasing LNG, to be brought either by the government or the industry itself.

“A majority of CNG filling stations are drying up due to unprecedented load-shedding as gas distribution companies could not meet the requirement of the CNG sector, which stands at 400 mmcfd,” the letter said.

“We are willing to receive LNG through the government or arrange it on our own to continue serving the needs of transport, preserve employment of CNG sector workers, protect investment of Rs450 billion in the CNG business and that of CNG users,” it said.

The industry believed that the acceptance of the proposal would lead to a decrease in the ratio of Unaccounted for Gas (UFG) in the CNG sector to zero.

It also asked the government to waive transport charges as gas companies were already getting return on their investment in pipelines and allied equipment installed for the supply of gas.

Input costs and taxes should be so adjusted that the CNG price could be maintained at maximum of 65% of petrol price, which would provide consumers a relief of 35%, it suggested.

“It will not translate into loss of revenue since LNG will be an additional gas and revenue from gas produced in the country will remain intact through other natural gas consuming sectors,” it said.

The association stressed that the ban on CNG kits and cylinders should be lifted so that consumers could replace aging equipment and use of substandard machinery could be curbed.

It proposed that all public transport should be converted from petrol or diesel into CNG to help commuters benefit from the economical fuel with an additional advantage of reduced pollution.

When contacted, the association’s Supreme Council Chairman, Ghiyas Abdullah Paracha, acknowledged that they had written a letter to the ministry, saying the government looked serious about resolving the energy crisis. “We will extend all possible support in this regard,” he said.

Published in The Express Tribune, November 1^st, 2013.

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