Government needs to ensure rational use of CNG

The government needs to ensure rational use of natural gas and minimise its wastage by standardising domestic and commercial gas appliances, instead of limiting gas supplies to compressed natural gas stations (CNG) and industries. These views were expressed by All Pakistan CNG Association Chairman Ghayas Abdullah Paracha while giving presentation on problems faced by the CNG stations to the Lahore Economic Journalists Association.
He said the CNG was introduced under the CNG Policy 1994 as an environmental-friendly fuel, and the policy promised to maintain a difference between petrol and CNG prices to encourage its use. This basic principal, he said, had been flouted and, at present, the CNG was only 40 percent cheaper than petrol against over 50 percent financial advantage over petrol in 1994.
He claimed that 2.5 million CNG-fitted vehicles, plying on roads in Pakistan, had helped reduce pollution in the big cities. The CNG-fitted vehicles used only six percent of the total gas consumed in the country that helped the nation save annually 1.6 million dollars in foreign exchange on petroleum imports, he said. Ghayas Abdullah said: "Power sector consumes 33.5 percent of the total natural gas consumed in Pakistan; industrial sector 23.8 percent; domestic 18.10 percent, fertiliser 15.60 percent, CNG 5.40 percent and commercial outlets 2.7 percent.
"During winter, the domestic consumption doubles due to use of geysers and room heaters," he added. According to him, squeezing CNG gas supplies does not resolve the problem, but will over-burden 2.5 million middle class consumers. He demanded a ban on substandard gas appliances, which would save almost 40 percent of gas.
Moreover, the CNG stations were ready to operate for 12 hours a day if the gas distribution companies assured uninterrupted supplies during the period when gas consumption was generally lowest in winter days, he said. On CNG tariff, he said it was initially fixed at par with the industrial tariff, but now it had been raised to Rs 427.15 per mmbtu as against Rs 339.43 per mmbtu fixed for the industry.
He said the CNG tariff was even higher than commercial gas tariff (Rs 393.33 mmbtu). Similarly, electricity tariff for the CNG sector had been increased in recent years, which was higher than the industrial electricity tariff, he said. These factors, he said, had forced them to increase the CNG charges over-burdening the consumers. According to him, mushroom growth of CNG stations has led to lopsided availability of CNG. Currently 3,000 CNG stations were operative in the country, of which many operated in clusters in many localities, he added.
He said the government had rightly slapped a ban on setting up new CNG stations, but it should at least allow relocation of some CNG stations from the cluster areas to places where there was scarcity of CNG stations. He demanded of the government to announce a clear and elaborate 10-year CNG policy, and said the government should cut gas supplies to any CNG station found involved in gas theft instead of resuming gas supplies after penalising them.
"Those involved in gas theft are selling gas at much lower rates to eliminate their competitors in areas where there are more gas stations than the requirement," he added. He also appealed to the Federal Board of Revenue (FBR) to stop the menace of double taxation on this industry.
He said besides paying four percent income tax on its gas bills as final tax liability, it was subjected to 10 percent advance tax on electricity bills. He demanded refund of this tax, and hoped that the government would not cut gas supplies to CNG stations during winter. He warned that if this step was taken, the CNG stations would be closed indefinitely.