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Indefinite Natural Gas


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As of late last night (Sunday November 25), DawnNews reported, “The Compressed Natural Gas (CNG) station owners have decided to indefinitely close down filling stations in Karachi and other cities across the country.” The stations in Sindh and Potohar region were supposed to close down at 12 midnight but instead they started closing earlier than the announced time even though there were massive queues as consumers rushed to prepare for the next working day after Ashura. Is this clearly not injustice being served blatantly on a platter to the citizens of Pakistan? Should the government and courts tolerate such a level of selfishness and insensitivity on the part of station owners?

Having already faced pre-announced gas load-shedding every week, sometimes for two consecutive days, there should surely be legal action taken. True, the station owners and courts have been intermittently going for each other’s throats since a month now when CNG prices were forced to be reduced by a huge margin, yet is there no one considerate enough on either side to ‘feel’ the hardships of the consumers who are stuck in the middle of this tug of war? Is it not time for both to settle this issue which has been literally lingering on, especially considering the fact that winter is coming and the gas crises in Pakistan is projected to worsen?

On a macro perspective, should the experts be called in to decide as soon as possible, a workable alternative for future transport consumption? If so, should CNG be seriously considered as an energy resource detrimental to Pakistan’s economic progress which needs to be ended completely as a source to consumers?

Comments (29) Closed

Tahir Naseer Nov 28, 2012 01:38pm
Natural gas is a precious asset of the nation as a whole. The usage of CNG and LPG should be banned in all vehicles especially the commercial ones. Many of the transport companies are charging their passengers according to the prices of petrol and diesel but run their vehicles on gas. A ban on larger scale will also help in reduction of accidents leading to loss of life. At the same time reduced demand / consumption will also compel the CNG station owners to reduce their prices.
Danyal Manzar Nov 29, 2012 08:19am
Malik Ogra cant finalize rates. Ministry of petroleum sets base prices and taxes if they are not reduced by the ministry OGRA cant do anything. OGRA only sets the formula of pricing and accordingly gives prices by that formula.
Hassan Rasheed Nov 30, 2012 02:21pm
There is a simple solution to the gas shortage. Gazprom, the state-owned Russian gas company, exports around 50,000 mmcfd of gas to Europe. Our maximum shortage during Dec-Jan is 1000 mmcfd. We don't need to invent the wheel to solve our issues. Iran is our neighbor and that is our easiest way out of this crisis. Is Pakistan the property of United States that we have abide by their ORDERS? The biggest American allies in Europe didn't stop buying gas from Russia during the cold war. This just puts in to perspective the loyalty of our Government which is directed towards the U.S. instead of its own people. Its high time that we stop fighting over who gets which resource. In energy values Petrol is Rs. 3450/mmbtu, Diesel is Rs. 3200/mmbtu and LPG is 3250/mmbtu. The most expensive gas is LNG and the international price of that is $15/mmbtu. That means that even if worst comes to worst, CNG sector should can be given imported gas on international trading price so that there is no load on local produce. The CNG sector being a private sector and being highly competitive as a result thereof, will still be able to sell CNG at around Rs. 2200/mmbtu, which is still around 30% cheaper than Petrol. Its such a shame that a problem that can be solved just by buying gas from the international market and then allowing the industry to convert into a fuel that will result in savings of atleast 30% to the public, is instead being mishandled in the worst manner and talks of scrapping Rs. 105 billion investment by the industry and more importantly Rs. 200 billion investment by the public in the form of CNG kits and cylinders, are on the way.
Danyal Manzar Nov 30, 2012 05:06am
Some of your information is outdated. This was 4 months back for fertilier industry it ranges from 50mmbtu to 128mmbtu and last price for CNG was 750+mmbtu before the SC price drop. And please refer to my other comments on tax of around 76% on this industry since last 3 years.
Danyal Manzar Nov 29, 2012 05:59am
They were in a room yesterday OGRA said we will do something about the production cost. And today ministry of petroleum wants new taxs implemented even after charging 76% in taxes on this product what do you suggest now?
Danyal Manzar Nov 29, 2012 08:14am
Who do you think is to blame? No one will operate at loss... You work to make money you do business to make money ....
Danyal Manzar Nov 28, 2012 07:37am
How are they ripping ppl off when govt is charging 76% in taxs? you need to really base your argument on facts. Here is a fact for you. Ethonal should be implemented and so should bio diesel. Factories have lived with low price gas for long. And should not be given gas to produce power. Electricty production through renewable sources should be implemented then can only we move forward. You argument is baseless and its clear that you are an industry owner.
Danyal Manzar Nov 29, 2012 08:16am
They should and they should also pay for gas bills. Infact Adv siddqui why dont you work for free? actually pay your company a monthly to work for them oh and back to my original argument farmers should pay consumers to buy their vegetables.... that will be perfect... do you live in the real world?
Danyal Manzar Nov 29, 2012 05:58am
Plz plz plz read what you right. OGRA sets price formula, ministry of petroleum sets base price and taxes... its not CNG station owners setting prices...
Danyal Manzar Nov 29, 2012 05:57am
here is news for you. And while you think CNG stations are the ones consuming all the Gas here is another eye opener read todays Dawn and there is an artical WIth the following heading: CNG Crises worsens Petrol Sales to exceed three million tons. According to this SSGC has confirmed that the total requirement of Baluchistan and Sindh in terms of gas is about 1300 MMCFD and current production is 1100 MMCFD( and believe me we have alot of unexplored reserves which are not being accessed due to law and order situation) and out of that CNG stations consume 90 to 95 MMCFD that is 8.18% of total production... now explain to me how its the stations consuming all the CNG? As for using banned cylinders the people using those cylinders should be banned (public transport that installs them, and ppl who sell them how is it the fault of a gas supplier?) And your third argument on running vehicles on petrol and diesel Pakistan doesnt have enough foreign exchange reserves to pay for even 3 months of import of oil based fuels. Yes we should go for alternate energy like wind energy to produce electricity instead of using gas to produce it. Similarly we need to go to bio diesel and grow plantation to support it and ethonal blend in petrol to reduce prices. But if the govt was even half willing to do this then the CNG crises would not be a problem today.
Danyal Manzar Nov 28, 2012 07:39am
Gas is a public service utility not a business. By your theory all farmers should pay people for buying their vegetables ...
Syed Nov 27, 2012 07:35am
The CNG station owners do not have the right to open or close the CNG stations at their own will and wish as they are getting the gas from the government sources. If there is no price check kept on the markets by the government then the consumer will ultimately have to suffer the blunt. CNG is not something being manufactured in the stations. It is just like petrol where prices are decided by the international market and then by the government.
Malik Salman Nov 28, 2012 11:18am
Danyal Manzar Nov 27, 2012 08:19am
The Station owners always fought against the unjust increase.
Malik Salman Nov 29, 2012 09:04am
i agree gas is an asset of our country. The commercial cars should be banned and as per the law maker the govt of make a department OGRA( oil and gas regulatory aythorty) onlly for oil nd gas issues. they should resolve the issue. and 2ndly the prices of distribtion of gas to industries,rea mill nd cng shud be same cng is purchasing gas 688 mmbtu industry purchasing 248 mmbtu urea purchasing 128 mmbtu CNG is consuming 7% asset per anum of gas so choice and decision should be fair and clear and equal for all
Afaq Ali Nov 28, 2012 10:31am
Government should intervene, put CNG associations and OGRA into a room and lock them until they come up with a workable solution. This is important for ordinary people so the resolution must be swift. Delaying tactics to get their way is no way serves the nation. If the government doesn't do it, SC should intervene.
Malik Salman Nov 28, 2012 10:31am
CNG rates are not to be finalized through Supreme Court Of pakistan. There is a department known as OGRA who is assigned for Gas and petroleum works only. So supreme court should talk to them. Station owners are not increasing or decreasing the fuel prices ogra is increasing the rates day by day. i wish gas is our own mineral there should be a difference of same kind but for that OGRA is not prepared to reduce any of their tax or rates than why Station owners make a loss of Rs 16 on every KG. result will be Shut Down of stations and blame should be on OGRA and Supreme Court. and CNG is a private business so no one can stop them to shut down there business. it is upto OGRA to finalize the issue at their earliest
Peace Loving Nov 27, 2012 11:32pm
you are totally ignorant. CNG is not like petrol that it comes in big tankers and delivered as such to the consumers. The gas that comes from source has to be processed to make it "Compressed". There are overhead expenses involved in this process. That is what has to be factored in.
imtaz Nov 27, 2012 06:28pm
well the CNG stations should be closed for ever and the gas should be diverted to household and industrial sector .It has now become obvious that for over a decade the government as well as CNG owners have ripped of the public . These greedy people are still making profit at current price but they still want more n more ..
Adv.Siddiqui Nov 28, 2012 05:22am
Goverment have complete Legal auhtoirty to decalre emergency take controll and deploy its men or army to operate all CNG pumps in larger public intrest. I wounder when Gov will use its power for benefit of Public >>>
abdussamad Nov 27, 2012 10:11pm
So let me get this straight. What you are saying is that because the CNG station owners paid good money to buy gas from the government they have somehow forfeited their property ownership rights? By that logic your house and everything in it is owned by the baker you bought bread from! Competition, not price fixing, reduces prices. Just look at how consumers have benefited from free competition in the telecoms sector.
Syed Shah Nov 27, 2012 01:56pm
It is a public service utility. They are not free to do as they please. They cannot close at their own sweet will. If they cant keep it open then their licences must be immediately withdrawn. Immediately. Go into some other less responsible business. CNG should only be used for cooking and private transport. It should not be used for generators or industry. Alternate energy can be harnessed be it Solar, Wind or Biodiesel.
Danyal Manzar Nov 27, 2012 08:18am
I want low price but I want the govt to reduce taxes do you know that cng sectors pay Rs. 700+ mmtu as compared to Rs. 50mmtu for other industries? do you know govt is making 41% GST(25% on Gas, 16% on KESC to produce CNG) and 14% withholding(4% Gas, 10% KESC) and about another 25% as CESS tax? The CNG station owners were not making money it was always the govt. They set the price to international petrol rates they always fought against it....
musanangialey Nov 28, 2012 10:47am
gas is not the personal property ofsomeone but as awhole of our state and if cng owners hikes their prices at there own wishes then what is the functions of law mwking and law enforcin agencies ? so first ofall govt should negotiate but if they flirting then govt should arrest them and seal there stations 4ever
abdussamad Nov 26, 2012 07:58pm
The CNG station owners are free to do as they please with their stations. You can't force them to open. They are not your stations. They are owned by private individuals. If the government is going to interfere in the operation of a free market economy by fixing the price of a good then it will have to face the consequences of that action. At times that may mean that CNG station owners enjoy huge profits at the expense of consumers. At other times it may mean that CNG station owners face huge losses and they shut down their stations to avoid those losses. If you want both low prices and availability of CNG you need to de-regulate the market and let the market decide the price. Competition will naturally force down prices.
Expat Nov 29, 2012 08:52am
Agree that Cng should not be used as commercially in factories, industries. Why don't we use coal for power generation? Only 1% coal is used for thermal power generation in Pakistan, despite the fact we have some 175 billion tons of coal reserves in Thar. FYI , US and China uses 50% coal for power generation.
DK Nov 28, 2012 09:07am
SC has allowed CNG stations to shut down if they are at loss, so who to blame???
a1261762 Nov 29, 2012 07:22am
All is wrong from the beginning. No one cares about the fact that we all are wasting such a blessing of Allah. Sellers/govt are doing everything they can to mint money from the people and the people are wasting it so mercilessly just for their own worthless comforts. No one's thinks of the future of this country or what the future generations will do as all are consuming all of the natural resources mercilessly. Be it water, gas, forests and so much more. The forests are gone, gas is also doubtful, don't care about the precious water, destroying our land by polluting as much as possible and the list is endless. I have heard that when the gas first came to lahore it was so cheap that people used to keep the stove burners running all day long just to save some stinking match stick. So in this case no one's innocent. I say that the gas shouldn't have been supplied to the public in general. Instead it should had been limited to industrial/commercial use and the public should get electricity from it at reasonable rates. But here no one gives a shit about any thing except for their own worthless personal gains.
Danyal Manzar Nov 27, 2012 08:14am
They pay for gas if they are paying more then they are earning then they have the right to shut down. Do you think money grows on trees?