December 12, 2008	Friday	Zilhaj 13, 1429

KARACHI, Dec 11: Frequent cuts in petrol prices are yet to make any major impact on the sale of compressed natural gas as CNG is still cheaper than petrol by 44.8 per cent, say CNG station owners.

On the contrary, CNG dealers are of the view that the gas sale in vehicles has fallen by at least 20 per cent after a decline in petrol prices.

CNG Dealers Association chairman Abdul Sami Khan said that petrol sale has improved after the price fall. He said that the government is planning to increase gas rates by six per cent from January. It also plans to cut petrol price in December. These developments would be devastative for CNG industry, he said, adding the industry representatives and the Oil and Gas Regulatory Authority (Ogra) officials would meet next month to discuss the gas price. The dealers do not support any move to increase gas rates, he said.

In case the government increases gas rates by six per cent, the CNG price would go up by Rs2.25 per kg which also includes the impact of increase in power tariff, he said.

CNG Station Owners Association chairman Malik Khuda Baksh, however, ruled out any negative impact on CNG sales so far in view of frequent decline in petrol prices as CNG is still cheaper by 44.8 per cent than petrol in terms of savings.

When petrol was being sold at Rs86.66 per litre between July 21 and Sept 1, the percentage of savings through CNG was 62 per cent. Now petrol sells at Rs57.66 per litre and CNG is priced at Rs44.50 per kg.

In case the government further cuts petrol price to Rs50 a litre or more, it may give a big blow to CNG station owners in view of possible depressed sales, he added.

Pakistan attained number one slot in terms of CNG vehicles population and stations in August 2007. Currently, over two million gas vehicles ply roads while the number of CNG stations is over 3,000, with an investment of Rs150 billion.

Argentina has 1.31 million CNG-fitted vehicles with 910 stations while Brazil has 891 stations with a population of 1.60 million gas vehicles.

He recalled an agreement between station owners and the government under which a 50 per cent difference between petrol and CNG prices had to be maintained.

The crude oil prices worldwide subsided drastically to below $40 from peak $147 a barrel in July this year.

“When petrol and diesel prices are coming down in the country, why CNG consumers are being deprived of cheaper gas,” he said.

Due to falling difference between prices of petrol and CNG the station owners cannot meet the overhead expenditure of CNG stations. He said 75,000 people are employed in office work and other jobs at pumps while 18,000 people are associated with technical work.

A refinery operator said that petrol demand has increased after a cut in prices and that is why PSO importing petrol in anticipation of rising consumption and to avoid any shortages.

He said sale of petrol in motorcycles holds 55 per cent share out of total sale of 120,000 tons of petrol per month.