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Association fails to ensure stability in CNG prices

ISLAMABAD - The CNG association has failed to ensure stability in the CNG prices which are still being sold at an average Rs48.80 per kg despite a downward correction made by the government.

However, the CNG Association believes that all the fuss about pricing has been created recently to deprive the common man of this cheap transportation fuel.

The association also finds it technically impossible to ensure uniform CNG retail prices as desired by the federal cabinet because of varying input costs and heating value of natural gas which differs from field-to-field and from province-to-province.

Petroleum Minister Shah Mahmood Qureshi is reported to have made an erroneous announcement early this month about Rs13 per Kg increase in CNG rates from existing rate of Rs38.80 per kg. The government later clarified that actual prices increase was Rs5.58 per kg (i.e. a sale price of Rs44.38 per Kg) and had set up a

committee to probe into the human mistake.

Resultantly, the government had decided to give a rebate to the consumers for two days to compensate for the error and the CNG owners obliged to sell the product at Rs38.80 per kg for two days. After two days, however, the CNG outlets reverted to the erroneous price of Rs48.80 per kg.

Former Chairman of All Pakistan CNG Owners' Association Tariq Kandan said that outlet owners were ready to present all facts and figures to any independent forum because they were accountable and answerable to the consumers but deplored that a lobby with vested interests had created an unnecessary fuss for no reason as if CNG industry was cheating the people. He said the said lobby wanted to bring CNG prices to bring at par with petrol prices. He said the use of CNG in private vehicles was now being described as misuse of CNG to manipulate higher CNG rates for the common vehicle users. He said the CNG industry has not fixed any price because it was a totally deregulated sector and every outlet had its own price but defended an average sale rate of Rs48.80 per kg saying the input costs had gone up significantly in the recent weeks.

He said the difference between the sale rates at the private sector and government outlets have never been higher than Rs4-5 per kg. He justified this difference saying the government CNG stations got subsidized land, grants for import of machinery and much lower rentals but that was not the case with the private sector.

Additionally, the private investors have to use diesel generators for eight hours every day on an average and hence half of electricity cost had gone up to about Rs16 per unit while the remaining 50 per cent to Rs11 per unit. Also, the monthly expenditure of CNG stations had increased by about Rs35,000 per month because of minimum labour wages fixed at Rs6000 per month by the government.