Import of CNG kits: Pressure groups, investment threat influence ban reversal

Embassies write letters, asking government to remove curbs.

Zafar Bhutta July 19, 2014


Intense lobbying by powerful groups and threat of blocking investment by some countries forced the government to lift the ban on the import of compressed natural gas (CNG) kits and cylinders despite acute shortage of gas in the country, people aware of the developments say.

Following imposition of restrictions, the previous government of Pakistan Peoples Party (PPP) had allowed import of CNG kits and cylinders in cases where bank contracts had been made before December 31, 2011.

This came in the wake of lobbying by seven powerful groups, which influenced government decision-making and booked kits and cylinders despite the ban.

The Supreme Court then took suo motu notice of the decision as the pressure groups imported 59 consignments. However, the decision was not implemented as the Ministry of Commerce refused to issue an SRO in this regard.

Now, that the Economic Coordination Committee (ECC) has lifted the ban on the import of CNG kits and cylinders, the pressure groups will take immense benefits.

According to officials, embassies of Japan, Italy and Argentina also played a key role in getting the ban lifted. They wrote letters to the government of Pakistan, asking it to remove the curbs as sales of their companies were tumbling.

They also warned that they would stop future investment in the automobile industry in case the restrictions were not set aside.

Separately, officials said, car manufacturers approached the government with the argument that their sales were also declining.

Even Italian firm Landi Renzo, engaged in the manufacturing and assembly of CNG kits in Pakistan, conveyed to the government that they would wind up their business if the import ban was not scrapped. It imports CNG cylinders and parts and components of cylinders and kits.

The company voiced concern that its future projects and investments in Pakistan could be in jeopardy.

Experts point out that gas supply in Punjab is quite unsatisfactory, but the situation in other provinces is comparatively better, where more vehicles will be run on CNG, putting pressure on gas supplies.

To tackle the situation, they suggest that the government should encourage the setting up of liquefied petroleum gas (LPG) stations in order to ease the pressure on CNG supply.

“LPG production has increased from 1,200 to 1,600 tons per day and the government should subsidise the fuel for consumption in residences and transport vehicles to reduce the burden on the networks of Sui Northern Gas Pipelines and Sui Southern Gas Company,” an official remarked.

Published in The Express Tribune, July 20th, 2014.

Like Business on Facebook, follow @TribuneBiz on Twitter to stay informed and join in the conversation.

Facebook Conversations