Oil and Gas Regulatory Authority (OGRA) and the representatives of CNG station owners are likely to agree on a rise in the gas price by Rs 10.56 per kg today (Thursday) which would then be submitted before the Supreme Court on December 17. All Pakistan CNG Association (APCNGA) has reportedly conditionally accepted the new price formula however it has urged Ogra to equate gas rates and taxes on all consumer sectors.
According to the formula, CNG price would go up by Rs 10.56 to Rs 72.20 per kg from the existing rate of Rs 61.64 per kg in Region-I comprising Khyber Pakhtunkhwa, Balochistan and Potohar region while in Region-II which consists of Sindh and Punjab provinces it would go up to Rs 63.76 against existing Rs 54.16 - an increase of Rs 9.60 per kg.
The Regulatory Authority has fixed value addition at Rs 5.46 per kg, operation cost at Rs 7.9 per kg, profit margin at Rs 3.42 per kg, gas sale price in region-I at Rs 31.09 per kg, Gas Infrastructure Development Surcharge (GIDC) at Rs 13.25 per kg, and General sales tax (GST) at Rs 11.08 per kg. While in region-II OGRA has proposed gas sale price at Rs 28.40 per kg, GIDS at Rs 9.18 per kg, and GST at Rs 9.40 per kg.
Dr Asim Hussain, Advisor to the Prime Minister on Petroleum and Natural Resources supports higher taxes on CNG with the objective of phasing out its use by vehicles to enable the maximum economic use of gas. In this context the Petroleum Ministry has proposed to bring CNG price up to 80% of the price of petrol and on-sent this proposal to the Economic Co-Ordination Committee of the Cabinet for final approval however the ECCC has deferred its decision on this. According to an APCNGA official, "CNG and petrol pump business are entirely different as far as expenses and other technicalities are concerned. Major investment in petrol pumps is made by Oil Marketing Companies (OMCs) while the operators get commission; on the other hand CNG station owners invest the entire amount on their own".
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