Rise in prices: drastic decline in CNG sales feared

Following the government decision to raise 31 percent gas tariff, the CNG sales is likely to decline by 15 percent, which would badly hit the investment of Rs 149 billion in the sector.
In an exclusive interview with Business Recorder, Malik Khuda Buksh, President CNG Station Owners Association of Pakistan (CSOAP) said that due to fresh hike in gas rates, association has been compelled to increase Rs 13 in CNG tariff and sell it at Rs 51.25 per kg to meet the running expenditures.
He opined that the new gas tariff would decline its sales by 15 percent and put excessive burden on the common man, who already are suffering badly owing to high inflation.
He said that separate tariffs should be evolved for commercial and domestic purposes because natural gas is being produced locally and urged the government not to compare its rate with international market. Despite efforts made by the sector to strengthen the country's economy, which facilitated the government to save around $3.5 billion in gasoline import during FY 2007-08, the sector is being hurt by unfriendly policies, Malik observed.
However, the government is spending huge amounts to import petroleum products, he said and stressed the need for providing special incentives for the development of the sector.
Commenting on the growing use of CNG, he said that Pakistan is the largest CNG consuming country in the world. According to the association statistic 2130 CNG stations are operating in the country while around 4000 CNG stations have been approved to be installed, he said and added that some 1.7 million light vehicles have been converted on CNG across the country.
He said that CNG sector was providing 49.2 percent cheaper and environmental friendly fuel as compared to diesel and petrol aimed to facilitate the consumers besides making efforts to ensure pollution-free environment across the country.
He expressed apprehension on recurrent hike in gas tariff, saying that the government has increased its rate twice during FY 2007-08, which creates a negative impact on its business and urged the government not to revise its rate again in the current fiscal year else the sector would face a very serious crisis.