ISLAMABAD, Jan 11: The government has decided to grant industry status to compressed natural gas (CNG) with all incentives and tax laws available to other industries.

Official sources told Dawn that cabinet committee on investment (CCOI) that meets here on Saturday would also approve two incentive packages for the import of hi-tech machinery for polyester fibre and petrochemical export besides rules for local agents of foreign companies.

Finance minister would preside over the CCOI meeting to declare CNG as an industry and approve incentive packages.

These sources said that industry status of CNG was solicited by the petroleum ministry to encourage CNG as alternative fuel because of its environmental-friendly nature and import substitution to slash oil import bill that last year amounted to around $3 billion.

The oil import bill this year is expected to reduce by around 30 per cent due to reduced consumption, lower international prices and slow industrial activity because of a number of internal and external factors.

The government intended to convert public sector transport to CNG including buses. The industry status to CNG would encourage import of machinery and equipment for this sector besides fully assembled large size buses for the public transport.

The CCOI would also approve rules for the registration of local agents to represent foreign companies in Pakistan.

Due to a drastic around 20 per cent decline in the exports of polyester fibre, the government has now decided to allow import of hi-tech plants and machinery for this sector.

Earlier, the government had decided to clear around Rs12 billion refunds to the polyester exporters by end of December 2001 but the central board of revenue (CBR) failed to meet the deadline given by the President.

The CBR has now secured one-month extension i.e. till January 31 to clear these refunds.

The CCOI that meets after a long time would also review implementation status of its earlier decisions besides considering various options prepared by Board of Investment to allocate an exclusive industrial estate for Silk Park to Chinese investors and exporters.