August 21, 2008	Thursday	Sha'aban 18, 1429

KARACHI, Aug 20: A CNG station spends on its overheads more than double the price it pays for the compressed natural gas to the supplier companies, the CNG Dealers Association claimed in the Sindh High Court on Wednesday.

The association submitted a statement giving break-up of the CNG price and overhead costs for ‘an average filling station selling 50,000 kgs of gas per month’ in response to a direction by a division bench, comprising acting Chief Justice Azizullah M. Memon and Justice Khalid Ali Z. Qazi.

The bench is seized of two petitions moved by advocates Javaid Ahmed Chhatari and Maqboolur Rehman.

The statement said a filling station buys the gas for Rs18.34 per kg from the gas pipeline company. The production and distribution costs, including taxes, electricity bill, and labour and overhead expenses, go up to a total of Rs45.22. The gas is sold to consumers for Rs47.25 at a marginal profit of Rs2.03.

The filling station thus earns a maximum of Rs10,1387 per month, which amounts to a return of 4.86 per cent over an investment of Rs25 million plus the rent or price of the land it is built upon.

Petitioner-lawyer Javaid Chhatari vehemently contested the figures and contended that there was no business that cost more than double the initial price of the commodity it supplied.

The overhead costs had been inflated as no manufacturing expenses were involved. It was not that the filling stations were buying raw material from producers and were supplying finished product to consumers.

Petrol pumps charge a commission of Rs2.5 per cent and make a sizable profit on their investment.

It was unbelievable that an entrepreneur would invest Rs25 million besides the cost of acquiring land to earn a little over Rs100,000 per month.

The respondent dealers association said in its statement that an average filling station pays Rs270,000 per month as electricity charges and incurs an expenditure of Rs155,376 per month on power generation for diesel stand.

Franchising costs another Rs201,465 per month while monthly maintenance costs Rs85,000 per month. The overall labour and overhead expenses, including Oil and Gas Regulatory Authority inspections, the employees salary bill (Rs104,583) and EOBI and SESSI contributions, amount to Rs366,342 per month.

Taking the statement on record, the bench decided to adjourn further proceedings to Sept 9.

Demolition of highrise

Another division bench, consisting of Justices Munib Ahmed Khan and Syed Pir Ali Shah, directed the Karachi Building Control Authority on Wednesday to demolish the Naseem Plaza at Lasbela and report compliance.

The residents association of the residential-cum-commercial complex submitted through Shakeel Ahmed, advocate, that the basement intended for car parking had been utilised by the owner-builder for setting up godowns and a garment stitching factory.

The compulsory open space had been covered and shops had been built over cables laid for electricity supply.

The petitioners claimed that the Karachi Electric Supply Corporation and the electricity inspector of the provincial government had declared the building dangerous.

The KBCA also stated that the building had been raised in violation of the sanctioned plan and the building regulations. However, the builder-owner obtained a stay order against demolition by undertaking to raze the offensive portions and by restoring the original plan as approved by the KBCA.

Several months had since elapsed but the builder is yet to fulfill his commitment.

Directing the KBCA to demolish the building, the bench asked the police and other agencies to assist the authority in complying with the court order.