The CNG Dealers Association (CNGDA) has threatened to shut down all CNG pumps, if the government did not withdraw the recent increase in gas prices within 10 days. This was stated by Abdul Sami Khan, President of CNGDA at a press conference at Karachi Press Club on Friday.
He termed the day, January 1, when decision was taken, as 'black day' for CNG industry, saying that the government had unilaterally increased the price of gas by 10 percent, which would raise CNG tariff by Rs 2.40 per kg, and added that total impact would be Rs 3.65 per kg after including recent hike in electricity tariff.
He said the government had formulated CNG policy in 1992, which aimed to overcome the petrol and diesel shortage, besides minimising import bill. To secure huge investment by investors in the sector, the government had assured all stakeholders that CNG would be sold 50 percent cheaper than gasoline rate, he said.
He however said that at present CNG rate was almost equival to gasoline price, which created immense difficulties for the survival of the industry. He said that oil marketing companies (OMCs) had persuaded the government to raise gas price. Sami termed the decision to overcome gas shortage during winter by starting gas load shedding in the CNG industry as illogical, saying the CNG industry consumed only 6 percent of total gas production, which would not create any positive impact on domestic consumers.
Many countries are providing incentives to their vehicle users and motivating them to run their vehicle on CNG, he said, adding that USA was giving $250 to each CNG vehicle user and $2500 to CNG vehicle manufacturers in this regard.
Earlier, Malik Khuda Buksh, Chairman, CNG Station Owners Association of Pakistan (CSOAP) said at another press conference that some 33 percent increase of gas prices in July 2008 by SSGC and SNGPL was fully absorbed in the sector by reducing their profit margin. He said the recent increase of 10 percent in gas price would force the CNG users to revert to petrol, which would be harmful for CNG industry.
He expressed fear that over Rs 60 billion, which had been invested by the middle and lower middle income groups to convert their vehicles on CNG, would go down the drain if the government did not withdraw its decision of raising 10 percent in gas tariff. Khuda Buksh said that CNG industry had reduced import bills and had saved over $250 million per annum in this connection.
He stressed the need of maintaining 50 percent difference in CNG and gasoline prices to promote CNG industry. He said that the association had sent a request to all high officials and concerned authorities for meeting and review of prices and added that CSOAP had also decided to wait for the government response and would meet again on January 4, 2009 for future action.
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