The government may maintain 50 percent price differential between CNG and petrol prices by applying industrial tariff to CNG, instead of commercial. CNG Dealers Association (CDA) chairman Abdus Sami Khan told Business Recorder that Minister for Petroleum and Natural Resources Naveed Qamar had assured him that 50 percent price differential between CNG and petrol would be maintained.
"A board, headed by Naveed Qamar, will consider the proposal," he said, adding that CNG price will be reduced by Rs 5 per kg by applying industrial tariff on CNG stations. He said he was not clear about the time when this tariff would be effective. The Oil and Gas Regulatory Authority (Ogra) recently notified an 8 per cent increase in the natural gas price effective from January 1, 2009.
According to the Ogra notification, the maximum sale price at the CNG stations for consumers of the NWFP, Balochistan and Potohar Region (Islamabad, Rawalpindi and Gujar Khan) was raised from 49.73 rupees per kg to Rs 55.30 per kg. Similarly, the maximum sale price of CNG was raised from Rs 48.54 per kg to Rs 53.63 per kg for consumers of Sindh and Punjab provinces.
After the recent raise in the price of CNG and reduction in petrol price, the price difference was as follows: petrol price at Rs 65.11 per litre and CNG Rs 55.30 per kg. Abdul Sami said that due to this minimal difference between CNG and petrol prices, CNG sales would decline with a consequent negative impact on CNG industry. After the meeting between Minister Naveed Qamar and all Pakistan CNG associations at PSO house in Karachi, the countrywide strike was called off after a board was constituted to consider the proposals.
The Minister requested the Association to submit a proposal requesting reconsideration of reversal of CNG tariff from commercial to industrial and to submit a presentation for the adjustment of withholding tax on electricity bills. Minister assured that the board will soon be notified and start working on the new CNG policy. However Minister expressed inability to lower CNG tariff, as it was purely the mandate of Ogra to fix CNG rate.