KARACHI, July 4: The petroleum ministry has finally cleared the way for CNG dealers and owners associations to fix the rate on their own, thus alienating itself from providing any protection to the consumers against higher prices.

Presently, about four kinds of rates of CNG are prevailing in the country starting from as low as Rs38.25 per kg, while many dealers are found charging Rs43.25, Rs47.25 and Rs51.25 per kg.

The ministry on Friday came out with the factual position regarding reports that the government had actually fixed the price after negotiations with various CNG associations.

It said that the price notified by the Oil and Gas Regulatory Authority (Ogra) on July 1, for the gas supplied by Sui Southern Gas Company Limited and Sui Northern Gas Pipelines Limited to CNG stations is Rs388.32 per MMBTU. The normal GST and withholding tax is also payable by the CNG stations.

The notified price plus the taxes is the input gas price for CNG stations. The Ogra and the government are responsible to the extent of the said prescribed price only.

The owners of CNG stations add their own operating expenses, which being deregulated, are determined arbitrarily by them, the ministry said adding that the notified price, including taxes and operating expenses etc of the CNG stations, is the ultimate sale price at the CNG outlets.

There is no point, as being printed in the media, in the government agreeing to any ultimate sale price, as a result of reported meetings with the associations, the latter being totally dependent to work out their costs.

Therefore, the ministry said, any controversy arising out of the statements of various associations should stand settled as the government/Ogra notifies the input price only being charged by the SNGPL/SSGCL from the various CNG stations.

It has been surprising that three associations of dealers and station owners are simultaneously operating in the country claiming to be genuine and registered with the commerce ministry. However, there should be one representative body to deal and negotiate with the government on all Pakistan level.

All Pakistan CNG Association Chairman Sana-ur-Rahman said that the issue of price fixing was resolved on Friday and there would be no confusion in the rates after ministry’s clear point of view.

Claiming to be the only association registered with DTO, he said that the dealers had fixed the rate at Rs47.28 per kg for Lahore, Rs48.36 per kg for Potohar area, Rs49.77 per kg for NWFP, Rs47.25 per kg for Balochistan and Rs47.25 per kg for Karachi and Sindh.

He, however, claimed that the profit margin of CNG stations had declined to 16 per cent as compared to 20 per cent. He added that it was the only association, which ensured sale of CNG at Rs38.05 in the country for more than two days till the final settlement on price was made on Friday.

Meanwhile, CNG Dealers Association Chairman Abdul Sami Khan told newsmen on Friday that the government had raised the CNG price by Rs13 per kg on July 1, but the petroleum ministry withdrew its decision next day by saying that the actual increase in gas price had been only Rs5.58 per kg.

On July 2, the association representative had disputed the Rs5.58 per kg rate with additional secretary petroleum in Islamabad because the latter had not included other expenses.

The additional secretary explained that the government had only increased the gas rate and asked dealers to include other charges and expenditure in the CNG price as the government had nothing to do with these charges.

The other expenses worked out to be Rs3.45 per kg thus making a cumulative impact of Rs9 per kg on CNG. The new retail rate had been fixed at Rs47.25 per kg.

Sami Khan had also released a paper to show how the new price had been calculated keeping in view the 31 per cent increase in gas prices.

He said that an independent judge be appointed to calculate the price of CNG in view of rising price of natural gas and expenses and the association would accept it.

When asked that the petroleum ministry had finally allowed a free hand to dealers to fix the rate, he said this was what the association had been clamouring that the Ogra and the ministry cannot intervene to fix the retail rate of CNG.

However, he said, that if the government takes back the 31 per cent hike in gas rates then the CNG price would come down to old level of Rs38.25. He added that the dealers had initially raised the rate to Rs51.25 per kg after a misconception that the five per cent gas development levy (GDL) on CNG was also included.

The association finally fixed the rate at Rs47.25 per kg in Karachi and Sindh while some other associations in Rawalpindi, Islamabad and Peshawar were insisting on Rs49.70 per kg and the Lahore-based dealers were demanding price fixation at Rs48.70 per kg.