The petroleum ministry has proposed that original equipment manufacturers (OEMs) or carmakers could be allowed to import CNG cylinders, kits and parts for conversion of vehicles at their manufacturing facilities. PHOTO: FILE
The Ministry of Petroleum and Natural Resources has once again asked the Economic Coordination Committee (ECC) to lift the ban on import of compressed natural gas (CNG) kits and cylinders, which will resume conversion of fuel system in vehicles from petrol to CNG at a time of looming gas crisis.
The ministry is raising the issue on the insistence of a major supplier of such equipment, cabinet sources say.
Earlier, the ministry had embarked on a drive to get the import restrictions scrapped in January 2014, but it got stuck because of acute gas shortages in winter.
“Now that the gas supply has improved, the ministry has again sent a summary to the ECC, seeking removal of the ban on import of CNG kits and cylinders,” a source said. The ECC is expected to take up the matter in its meeting next week.
During the tenure of the previous Pakistan Peoples Party (PPP) government, the ECC slapped a blanket ban on November 29, 2011 on company-fitted CNG kits and cylinders in locally manufactured vehicles and also imposed curbs on their import except for cases where letters of credit (LCs) had been opened prior to the decision. It, however, exempted CNG-fitted public transport vehicles from the restrictions.
In response to an earlier summary submitted by the petroleum ministry on February 22, 2013, the ECC decided that import of kits and cylinders for which LCs had been opened or bank agreement or bank contract already concluded before December 31, 2011 may be allowed.
It also agreed that for developing the export business of CNG conversion kits, the import of parts and components may be allowed on the condition that these parts were not manufactured in the country. However, this decision sparked a controversy as a group of companies allegedly got some favour, prompting the Supreme Court to take notice of the matter.
The petroleum ministry said the decision had been conveyed to the quarters concerned for its implementation. However, the Ministry of Commerce has not so far issued the SRO in this regard.
According to officials, the petroleum ministry in its fresh summary has proposed that original equipment manufacturers (OEMs) or carmakers could be allowed to import CNG cylinders, kits and parts for conversion of vehicles at their manufacturing and assembling facilities.
The ministry also referred to letters written by the Oil and Gas Regulatory Authority (Ogra), in which the regulator pointed out that curbs on the import of CNG kits and cylinders were encouraging installation of smuggled, unapproved and unsafe cylinders in vehicles, especially public transport vehicles, putting public life and safety at risk.
Ogra believed that the federal government could reconsider its policy in this regard.
The PPP government had imposed restrictions on Landi Renzo, a multinational company, which installed CNG kits and cylinders in locally manufactured vehicles. The company was allowed import of parts and components for CNG kits for export purposes only.
Landi Renzo produces auto gas and CNG kits for cars with its headquarters in Italy. It has made foreign direct investment, estimated at €7.7 million, in Pakistan through Landi Renzo Pakistan by establishing a CNG kit manufacturing and assembly plant.
Along with local supply, the company exports CNG kits to Brazil, China, Iran and Italy with export volumes valuing €3.7 million. The petroleum ministry pointed out that the company had contributed Rs684 million in taxes from 2009 to 2012, but after the imposition of the ban, its sales had dropped sharply.
The company was concerned about future projects and investments in Pakistan and believed the government should review the ban.
Published in The Express Tribune, June 19th, 2014.
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We have a shortage of gas and they want to encourage CNG use. Our ministries are so easily bought off by lobbyists.
There is not Gas in the country, lot of industires shut down and other ready to shut down due to lack of Gas, IP line failirue , in spite of all reasons why Govt wants to lift ban on CNG equipemnts, i think there is some thing worng like commission for officials