CNG sector on the brink of bankruptcy due to lockdown

23 Apr, 2020

Before the spread of coronavirus, the consumption of CNG stood 205 mmcfd, which has now reduced to only 87 mmcfd, after the announcement of the government to ban all kinds of public transport to contain spread of the virus.

The CNG usage in Sui Southern Gas Company (SSGC) is reduced to 29 mmcfd from 66 mmcfd.

The consumption of CNG in KP reduced from 78 mmcfd to 43 mmcfd, and RLNG usage also reduced from 61 mmcfd to only 15 mmcfd.

The CNG Association calculated that the consumption of CNG dropped nearly 85 percent and petroleum consumption dropped 75 percent.

Leader of the Petroleum Dealers Association and All Pakistan CNG Association Ghiyas Abdullah Paracha stated that the government should come forward immediately to rescue this important sector, which is moving the wheels of the economy.

He said that the cost of doing business is increasing while profit continue to decline, which has pushed dealers to the wall, therefore the government should provide them with some relief in electricity bills and taxes.

He further said that the recent oil price reduction by the government resulted in heavy losses to the oil dealers the lockdown has reduced the sale of fuel, while safety measures has increased cost of doing business.

Ghiyas Paracha said that the fuel supply chain has suffered a lot due to recent disruption compelling dealers to increase storage amid low sales, which is an added problem.

He said that cost of land and rent has increased a lot, making the petroleum business almost unfeasible, which can be countered with allowing commercial activities at filling stations, reducing distance between fuel filling machines, and new profit regime under the new rules and regulations.

The oil dealers are facing unprecedented losses but they are paying different fixed charges, while the dealers have not fired employees, which has added to the financial burden that must be noticed, he said, adding that all the sectors demand subsidies but petroleum and the CNG sector only demand its right, therefore the government should resolve their problems.

Copyright Business Recorder, 2020

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