Compressed Natural Gas (CNG) is selling at Rs 40 per kg at several filling stations across the provincial capital, which is some Rs 8 less than the price fixed by the Oil and Gas Regulatory Authority (Ogra), owing to stiff competition. The marketing of CNG at Rs 40 per kg, which supposed to be sold at Rs 48 per kg, has exposed all three CNG associations, who claim that they are running pumps at nominal profit margin.
They claim the CNG station owners are earning only 20 per cent profit, which is around Rs 9.6 per kg. However, the reduction of Rs 8 in its prescribed rate has proved that the CNG stations are making huge bucks. The natural gas is being provided by the gas companies at around Rs 18 per kg to CNG stations, including all levies, but the consumers are paying more than 200 percent excess amount to purchase it.
If all expenditures including electricity charges, wages, maintenance etc were excessively calculated at Rs 15 per kg, the profit at per kg was still Rs 15. When contacted, Abdul Sami Khan, chairman, CNG Dealers Association of Pakistan said some 8 to 10 CNG filling stations in the metropolis were selling CNG at Rs 40 per kg because of tough competition. He informed that the association had earlier asked the government to draft a comprehensive policy pertaining to the installation of CNG pumps.
Besides that the association had also stressed the concerned authority to declare 1.5km distance between two pumps as mandatory requirement for acquiring CNG pump license, but the proposal had been ignored, which left no option for CNG station owners except to reduce CNG rate substantially for survival. To a question, he said, "It is understood that they are running pumps with zero per cent profit so it is quiet possible that they might be using illegal means like unauthorised gas connection, tampered CNG meters, etc to compete others."