KARACHI, Aug 7: Dealers have rejected the role of the Oil and Gas Regulatory Authority (Ogra) in fixing the CNG prices as proposed under the new CNG draft policy 2007.

While agreeing on most proposals of the draft policy, the CNG dealers have some reservations on pricing issue and they want no intervention of any government agency in this matter. Regulations and the government’s unnecessary interference would stifle the CNG sector growth.

Under the present deregulated scenario, the dealers said that only the CNG operator should be made responsible for fixing prices in accordance with market trends.

The petroleum ministry has circulated the draft CNG policy among all the CNG related bodies for the feedback and comments before finalising the draft. One of the clauses relating to CNG prices in the draft says that Ogra will ensure that the government’s resolve to keep the CNG consumer price deregulated may not be misused by the licensees through cartelism and determine the same by their trade bodies.

A CNG station owner will be free to determine his selling price in accordance with the market trends so that the consumers could enjoy the benefit of competition.

However, if the prices fixed by the licensees are considered to be unreasonable, the OGRA will intervene and fix a reasonable price.

Notwithstanding the above policy, the federal government would like to maintain a relationship between the consumer price of CNG and that of motor spirit and diesel.

Chairman CNG Dealers Association Abdul Sami Khan in his comments to draft CNG policy sent to the ministry said that the CNG operators were largely responsible persons and this was evident from the present level of CNG prices, which were less than 40 per cent of petrol prices.

He said that the association had also agreed with the proposal that no new CNG station would be constructed in the residential areas and no CNG pumping unit would be installed within one kilometer of the existing outlets on the same side of the road.

Under the draft policy draft a licensee from the OGRA will be required to install CNG kits and cylinders at the premises of the outlet. Mr. Khan said CNG stations should only be entitled to install CNG kits under their marketing license and no separate license should be made a condition.