KARACHI, June 24: The price of compressed natural gas (CNG) will cross Rs50 per kg after 30 per cent increase in its rate and levy of five per cent gas development surcharge from July 1, 2008.

Pakistan Petroleum Dealers Association and CNG Dealers Association Abdul Sami Khan Chairman said on Tuesday that the government “aims to bring the CNG price at par with the diesel” to generate revenue. Currently, CNG costs Rs38.25 per kg.

He said putting burden on the industry through various levies will impede investment by the private sector, besides hurting the future plans of many vendors, who are preparing to make dispenser, CNG kits and other parts in Pakistan.

The ministry of petroleum in a proposal submitted to the ECC of the cabinet this month said that it was in the process of finalising a summary for revision in gas prices and would be recommending 44 per cent increase in CNG price so as to bring it at 60 per cent parity of petrol price. With this proposed increase the CNG price would become 84 per cent of the price of diesel.

Besides, the government is also imposing five per cent GDL on CNG.

The petroleum ministry further informed the ECC that the CNG “does not fall with the definition of petroleum products” as provided in petroleum products (Petroleum Development) Ordinance 1961 (PDL Ordinance 1961) Annex-II, therefore, PDL cannot be extended to CNG until and unless an amendment in PDL Ordinance is brought about.

The ministry said that it was felt that any further burdening of the end- consumer in the form of proposed surcharge/levy would increase CNG price to a level where the use of diesel would become relatively more attractive, which is already subsidised and imported.

Sami Khan told a press conference on Tuesday that the association had been opposing the imposition of GDL as it will badly hurt the CNG industry and millions of investment will be lost.

On petroleum products’ shortage, he said, diesel and petrol availability is getting worst day by day since the oil marketing companies (OMCs) have reduced the supplies.

He said that the situation was alarming in the interior Sindh and Punjab. Diesel is in short supply in NWFP as it is being smuggled to Afghanistan.

He said in a meeting with OGRA, it was decided amicably that the matters relating to the OMCs would be put in a meeting of OMCs and PPDA but the Oil Companies Advisory Committee (OCAC) has not called a single meeting during last couple of months.

He said dealers and even the consumers did not know as to how much quantity of petrol and diesel was being supplied, imported and produced. Even the OCAC did not inform the dealers about the country’s position of POL stocks.

The OCAC is doing nothing for the consumers so this organisation should be abolished, the PPDA chief demanded.