July 17, 2008	Thursday	Rajab 13, 1429

ISLAMABAD, July 16: Retail outlets are still selling CNG at an average price of Rs48.80 per kg despite correction by the government of an erroneous announcement about price increase.

The CNG Association believes that the situation has been created to deprive people of the cheap fuel.

The association finds it technically impossible to ensure uniform CNG retail prices, as desired by the federal cabinet, because of varying input costs and heating value of natural gas which differs from field to field and province to province.

Petroleum Minister Shah Mahmood Qureshi made an erroneous announcement earlier this month about a Rs13 per kg increase in CNG rates from Rs38.80 per kg. The government later clarified that the actual increase was Rs5.58 per kg (to Rs44.38 per kg) and set up a committee to probe into the “mistake”.

The government decided to give a rebate to the consumers for two days to compensate for the error and the owners of CNG filling stations agreed to charge Rs38.80 per kg for the period.

After two days, however, the CNG outlets reverted to the Rs48.80 price.

Former chairman of the All Pakistan CNG Owners’ Association, Tariq Kandan, told Dawn that the owners were ready to present facts and figures to an independent forum but alleged that a lobby with vested interests had created an unnecessary fuss on the issue.

He said the lobby wanted to raise CNG prices to the level of petrol prices. He said the use of CNG in private vehicles was now being described as “misuse” to justify higher rates.

He said the CNG industry was a deregulated sector and every outlet had its own price. However, he defended the average rate of Rs48.80 per kg saying that the input costs had increased significantly in recent weeks.

He said the difference between the rates at private and government outlets had never been of more than Rs4-5 per kg. He said that government CNG stations got subsidised land and grants for import of machinery and were charged lower rentals.

He said private investors had to use diesel generators for eight hours a day on an average and hence half of their electricity cost had increased to about Rs16 per unit and the remaining to Rs11.

He said the monthly expenditure of CNG stations had increased by about Rs35,000 per month because of a raise in minimum labour wages to Rs6,000.

He said the owners had overcharged consumers to the extent of about Rs17 million but had returned a rebate of Rs38 million in two days. He said the owners provided details of expenditure and costs to Ogra almost on a regular basis and there had never been any doubt about the reasonability of the profit margins.