THE use of natural gas, a vehicular fuel, has turned into a racket from which there seems to be no extrication.

It has been almost 10 years since Gen Pervez Musharraf’s government made the decision to ‘migrate’ large numbers of vehicles to CNG in an effort to keep auto transport affordable in an era of sharply rising oil prices, as well as check the growing oil import bill. In the short term it worked.

The number of automobiles on the roads multiplied faster than during any other decade in Pakistan’s history under the former general’s rule, a fact he touted as an emblem of his success.

And CNG stations sprang up like mushrooms all over the country.

Also Read: 200mmcfd of imported LNG approved for CNG users

Today, the CNG sector is amongst the largest consumers of natural gas in the country, with high rates of loss and theft, pumping growing volumes of precious fuel into highly inefficient engines, and has grown into such a lucrative enterprise that no government has been able to shut it down.

The present government has also wearied of its efforts to restrain the sector’s unending appetite for precious and dwindling fuel. Instead of further curtailing the sector’s allocations, the Economic Coordination Committee is exploring a proposal to allow the import of LNG specifically to feed CNG stations around the country.

The proposal has been supported by the All Pakistan CNG Association which has agreed to a curtailment of almost 22 mmcfd of gas from its quota if this can be made up from imported LNG instead.

But in order to keep costs constant, the government will have to give considerable tax benefits to the LNG imported under this proposal, a step the IMF has already frowned upon.

Also Read: Cabinet approves LNG import

The government has limited options though since further curtailment to the sector is proving politically impossible.

So while they’re talking about a proposal to arrange alternate supplies for the sector, perhaps a market pricing model can also be bundled into the measures to further encourage efficiencies and reduce losses.

Published in Dawn, September 13th, 2014