Separate tariff for CNG demanded

The CNG Stations Owners Association of Pakistan (CSOAP), Multan chapter, has demanded of the government to introduce a separate tariff for the compressed natural gas (CNG) to protect the investment of billions of rupees by CNG station owners. It urged the Ministry of Petroleum and Oil and Gas Regulatory Authority (Ogra) to keep the CNG policy 1992 enforced.
According to the CSOAP spokesman, the recent steps, taken by the government to increase gas price, would damage the CNG industry and would put additional burden on common man. He said the current increase of 10 percent in gas prices was unjustified and uncalled for when the fuel prices all over the world had plunged. The 33 percent steep increase of gas prices in July 2008 by the Sui Southern Gas Company Limited (SSGCL) and Sui Northern Gas Pipeline Limited (SNGPL) was fully absorbed by the CNG station owners and dealers by reducing their profit margins, he said.
The spokesman said the CNG sector as a whole consumed less than six percent of the total gas output from the SSGCL and SNGPL. The investments of more than Rs 60 billion of the middle and lower middle class people, who converted their vehicles to use cheap and environmental friendly CNG, would go waste if the government did not withdraw the recent increase in gas price immediately.
He maintained that this policy was formulated when the government had shortage of petrol and diesel reserves in Pakistan. Any change in the said CNG policy would discourage investment and result in political turmoil and would force the middle and lower middle class to use higher priced fuel, he added.
He said the CNG industry's efforts to reduce the government's burden of foreign exchange payments and huge savings of forex reserves resulted in shift from petrol and diesel to CNG use in vehicles. He said the use of CNG had helped the government save more foreign exchange worth than 250 million dollars per annum.
He was of the view that the recent increase CNG tariff would force the CNG vehicle owners to buy CNG at a higher rate, forcing the CNG stations to close down their businesses, leaving 2.1 million vehicle owners, including rickshaws and taxis prone to inflation.
He opined that to promote use of CNG in vehicles, a minimum price differential of 50 percent needed to be maintained at all times so as to discourage people to use environmentally harmful and hazardous fuel in vehicles. He said if the government did not meet their genuine demands, they would be forced to shut down their businesses and would not be able to pay their leasing payments and other loans.