The Oil and Gas Regulatory Authority has fixed CNG price at Rs 74.44 per kg in region-1 which consists of Khyber Pakhtunkhawa, Balochistan and Potohar and Rs 65.78 in region-11 which consists of Punjab and Sindh. In region-1 the CNG price has been increased by Rs 12.80 per kg, while in region-11 the price has been raised by Rs 11.62 per kg.
The decision was taken on Tuesday during the meeting of special committee of the Cabinet. The committee was headed by Law Minister Farooq H Naek to settle the issue lingering on for two months and has virtually paralysed the country. The All Pakistan CNG Association (APCNGA) while rejecting the new prices has asked the government to restore previous profit margin for the CNG station owners.
Adviser to the Prime Minister on Petroleum, Dr Asim Hussain, told media that fixation of CNG price is the domain of Ogra. He said if the CNG Association wants to revive the pricing mechanism, the government is ready to discuss the issue. However, he maintained that old profit margin is unacceptable.
According to a notification issued here on Tuesday the Authority after receiving the Petroleum Ministry's policy guidelines has increased commodity price from its existing rate of Rs 61.64 per kg in region-1 to Rs 74.44 per kg and Rs 54.16 to Rs 65.78 per kg in region-11.
After the Supreme Court directions on October 25, 2012, the Authority fixed CNG price at Rs 61.64 per kg in region-1 and at Rs 54.16 per kg for region-11. The regulator has fixed operating cost of gas at Rs 7.90 per kg, electricity cost at Rs 7.21 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 (GIDS) 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.
As per the Petroleum Ministry's policy guidelines, the ministry will ensure sanctioned gas load for the CNG stations as per agreement and if any CNG station violated the prescribed agreement, the ministry would disconnect gas supply of such CNG stations. For additional gas load CNG stations would have to deposit additional security with the ministry.
Meanwhile, APCNGA has rejected the new CNG pricing formula terming it illogical, illegal and against the interests of CNG sector. "As a first step, we will challenge the controversial decision in the Ministry of Petroleum and Ogra while later on we will announce schedule for protests against the decision," said Ghiyas Abdullah Paracha, Chairman Supreme Council APCNGA.
In a statement issued here Tuesday, he said the latest CNG pricing decision is one-sided and irrational where demand for uniform gas prices and taxation as well as right to just profit margin were not accommodated. Moreover, Ghiyas Paracha said, globally accepted accounting principles were violated; CNG station owners were not allowed to meet the gas cost while the profit of the CNG stations is linked to petrol pumps which is unjust.
A cut in taxation would have helped the CNG sector and the masses which was unfortunately ignored while the hike in power tariff was not accommodated, said Paracha. He said the sub-committee of the ECC formed to hammer out solution for the outstanding CNG issue had taken the decision before the meeting while the stakeholders were called to let them know about the decision which was against the claims of the committee. Paracha said that no CNG operator can continue business honestly while observing the terms and conditions of Ogra, which will pave way for protest.
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