New CNG stations: Cabinet Division puts off probe into violation of ban

Calls back summary sent earlier to Economic Coordination Committee.

ISLAMABAD:

The Cabinet Division has shelved an investigation plan to find out how the oil and gas industry regulator allowed the setting up of new compressed natural gas (CNG) stations despite a ban during previous government of Pakistan Peoples Party.

Sources disclose that the Cabinet Division has withdrawn a summary sent to the Economic Coordination Committee (ECC), seeking permission to conduct a comprehensive probe into the grant of licences by the regulator for establishing CNG filling stations in violation of the restrictions imposed by the government.

The curbs were slapped following a presentation given by the Ministry of Petroleum and Natural Resources and Ministry of Water and Power on February 6, 2008 to then acting prime minister Mian Mohammed Soomro over the looming energy crisis.

After the presentation, the premier decided to stop the issuance of licences for setting up new CNG stations.

According to sources, the cabinet committee constituted to propose measures to resolve the energy crisis took up the issue of new licences and wanted a thorough probe.

The ECC held deliberations over the illegal grant of licences in April this year and sought legal opinion of the Law Division as the matter was being investigated by the National Accountability Bureau (NAB), sources said.

The Law Division was asked whether the cabinet committee could discuss the issue at a time when the Supreme Court of Pakistan and NAB were dealing with it. In response, the Law Division suggested that the cabinet body could undertake an investigation in this regard.

The regulator – the Oil and Gas Regulatory Authority (Ogra), however, argues that provisional licences for CNG filling stations were converted into marketing licences in the light of instructions given by the Prime Minister’s Secretariat and under Rule 7 of CNG (Production & Distribution) Rules, 1992 after completing necessary formalities.

The previous governments had been issuing CNG licences without framing any policy, which resulted in a mushroom growth of gas filling stations in densely populated areas of the country.

Now, the present government plans to provide some liquefied natural gas (LNG) imports to CNG stations and save domestic natural gas supplies for power plants. The plan, if approved, will help divert 628 million cubic feet of natural gas per day (mmcfd) to the power producers, which will lead to an increase in electricity production and control hours-long outages, which have erased 3% of economic growth every year.

The plan is designed to save the CNG industry, estimated to have invested Rs450 billion, from financial collapse, especially in Punjab. About 300,000 skilled and unskilled workers are directly associated with the industry and 150,000 people are indirectly related.

At present, about 3.7 million vehicles, equipped with CNG conversion kits, run on gas in place of petrol.

Published in The Express Tribune, September 2^nd, 2014.

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