ISLAMABAD, Nov 3: The Oil and Gas Regulatory Authority (Ogra) on Saturday asked all owners of CNG stations to continue selling the fuel at the reduced rates, but the association’s body slams the regulator for forcing them to sell on losses.
The tension erupted between the owners and regulator in the wake of unexpected reduction in the retail price of CNG by over Rs30 per kg on October 25 following a Supreme Court order.
“We have decided to take action against owners of 10 CNG stations, mostly in Punjab, who had halted the sale despite clear instructions from Ogra”, Ogra Chairman Saeed Ahmad Khan told Dawn on Saturday.
He said complaints had so far been received only against those stations which went on a strike without any technical reasons and defied to sell at the reduced rates.
On Oct 26, Ogra sent letters to provincial chief secretaries, managing directors of the Sui Southern Gas Company Limited (SSGCL) and Sui Northern Gas Pipelines Limited (SNGPL) to trace such stations which had stopped selling CNG.
The only reasons that allow a CNG station owner to stop selling in case of low gas pressure, technical problem and scheduled announced days of loadshedding, , Mr Khan elaborated.
Other reasons, including a strike or defying the regulator’s order, fell in the category of violation of conditions attached with the licence, the chairman explained.
As per licence conditions, any one found not selling CNG without any valid reasons can attract major penalties starts from suspension of gas supply, monetary penalty to extreme penalty of cancellation of licence.
The Ogra chairman said heavy penalties would be imposed on the violators and directed all the departments concerned to report closure of CNG stations in their respective areas.
Asked that the local administration was also forcing CNG station owners to continue selling, he replied that he was not aware of that.
As per Supreme Court order, CNG stations will have to sell CNG at the reduce rates until Nov 19.
Chairman Supreme Council of All Pakistan CNG Association Ghias Abdullah Paracha dissociated himself from the closure of CNG stations. Mr Paracha said closure of stations were acts of individual owners.
The association, he said, has no intention to call a strike. “We are preparing our case for the next hearing,” he said, adding the association’s focus was only on fighting the case in the superior court.
The chairman slammed the petroleum ministry for their unilateral decisions in the past few months for destroying the CNG industry in the country. “Millions of people will be affected with the closure of CNG stations”, he warned, adding if there were no stations from where car owners will fill their car tanks.
In the recent past, the petroleum ministry through Economic Coordination Committee of the cabinet had slapped ban on import of CNG related equipment, machinery etc., without prior consultation with the relevant stakeholders. “This is not simply an issue of price, but the vested interest groups who directly or indirectly wanted to destroy the CNG industry,” Mr Paracha elaborated.
Selling of CNG at the reduced rates, Mr Paracha said was causing a loss of Rs18 to 22 per kg in Khyber Pakhtunkhawa, Balochistan and Potohar region. However, CNG’s stations owners were facing a loss of Rs12 to 18 per kg in Sindh and central Punjab.
The association through its counsel, Dr Abdul Hafeez Pirzad has also sent a letter to the Ogra chairman on Nov 2. The copies of the letters were also sent to the petroleum secretary and managing directors of the two-state owned gas companies.
The letter says Ogra has reduced the price of the CNG by not recognising the operating costs of the CNG stations and the profit to which the CNG stations owners are lawfully entitled.
“The owners and operators of CNG stations are being forced to sell gas at a rate below the costs incurred by them, which is causing a substantial and recurring loss to them,” the letter said.
It further said that the selling of CNG at the reduced rate will result in the insolvency of owners and shutting down of the CNG stations. “It is beyond the capacity of almost all the station owners to continue to subsidise the shortfall from their own resources”.
The letter further said that the CNG price should be reduced by also re-addressing and revising downward the other components of the CNG price. Ogra desist from compelling the CNG stations owners to operate the CNG stations at a loss, and to refrain from imposing any penalty against those who are unable to cooperate CNG stations at a loss during the pendency of the proceedings, the letter requested.