CNG stations closed as talks fail

Published Nov 27, 2012 12:02am

— File Photo

ISLAMABAD: Amid a deadlock on the issue of CNG prices, owners of CNG stations announced on Monday closure of their outlets, saying they could no more bear losses and subsist on loans.

At a meeting chaired by Oil and Gas Regulatory Authority (Ogra) chairman Saeed Ahmed Khan and attended by representatives of the ministries of petroleum and finance, a delegation of the association of owners of CNG stations presented a three-point pricing formula, seeking reduction in taxes and withdrawal of cross-subsidy being paid by the CNG sector.

The representatives of the ministries did not accept the demand for tax reduction and said federal budget had been prepared on the basis of revenue expected to come from the CNG sector.

The talks were marred by a surprising walkout by the Ogra chairman who said the CNG sector was trying to create confusion over pricing and supporting the petroleum ministry’s move to bring the regulator under its control instead of allowing it to independently perform its duty. However, he rejoined the meeting after some time.

In its formula, the association demanded withdrawal of Rs6 per kg cross- subsidy imposed on CNG sector, requiring it to sell natural gas to other sectors, like domestic consumers and fertiliser companies, at lower rates. It also demanded gas infrastructure development cess (GIDC) should be paid by all consumer sectors at a uniform rate and claimed that the CNG sector was paying the cess at a higher rate than other sectors.

It demanded electricity cost of Rs12.78 per kg in CNG pricing, production cost of Rs13.12 per kg and profit margin of Rs6.38 to Rs9.94 per kg.

The delegation of the association said application of the formula would limit CNG prices between Rs46.26 and Rs72.04 per kg.

The delegation was told that its views on the cost of gas would be looked into during public hearings for revenue requirements of gas utilities and its demand for lower taxes would be taken up separately with the government.

However, the representatives of Ogra and the ministries refused to commit on tax reduction.

The talks were held against the backdrop of a directive issued by the Supreme Court to the government and the CNG sector to amicably settle the dispute (over CNG prices) before it could take a decision.

Talking to reporters, the association’s leader Ghiyas Abdullah Paracha said the owners had closed CNG stations as a last resort because they were unable to bear more losses. He said after the recent steps taken by the government running a CNG station was no more a viable business. The owners had been forced to take loans to pay utility bills and salaries of employees, he said.

He urged the government to introduce uniform rates of gas and taxes for all the sectors to provide a level playing field, instead of providing relief to influential sectors at the cost of CNG consumers.

He claimed that the Ogra chief had agreed in the talks that the CNG sector had been overtaxed and promised to take up the issue with the government.

He said the only rational way to provide relief to common people was reduction in gas cess and surcharge.

He said the association had not asked anyone to close his CNG station but it had become unviable for the owners to run their business and, therefore, they were closing down their outlets.

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Comments (4) (Closed)

Nov 27, 2012 11:55am
CNG mafia is looting the poor public.I think govt should close all the CNG stations if they are not agree to sell the CNG on rate determined by SC and this gas should be given to the industry. So that the financial situation may get on track.
Nov 27, 2012 05:45am
Why the CNG stations are closed,they should wait till SC will decide the matter,I am unable to understand the profit for the CNG stations, when they are selling the CNG Rs.35 or 36 per kg they are not getting the profit,if they are not agree on the prices fix by the Govt. All the CNG stations should be seal by the Govt, because they are creating problems for the common people. Secondly the Govt. should make the audit teams and prepare the for their profit and inform the general public how much profit they are getting.
Khalid Saleem
Nov 27, 2012 09:22am
CNG VS. TRANSPORTATION Recently the decision of honorable chief justice regarding the CNG prices as much higher they received from the general public, as the Govt not want to give some relief to the pitiable public of bomb blast and every day suicide, terror attack, it is all on his own place, it is astonishing that why the CNG is directly proportion to transportation. The CNG association has shut down their CNG station bez they not want to see the public happy and to provide relief. It is well understand that CNG Mafia not earn that amount which they earned in past and perceived now but the question is that why the transport association has stop their services bez their rate is determine on the basis of petrol and diesel when the price of CNG come to 61, the fare of local transportation was kept same, now when the CNG close their station, the transport Mafia stop their service. Is it not the responsibility of state and Govt authority to ask the transport Mafia that why they not run their services bez their fare is determined on the basis of diesel and petrol and not on CNG? Are Govt authority not wants to see public happier and to provide relief, are this is another tactic used to give birth for another crisis. As today in Peshawar no sufficient transportation was available on road and all was disappear and they argued that CNG is not available in market while local bus is not determine on CNG. ?
Mir Mahmood
Nov 28, 2012 07:05pm
Mostly the people of pakistan travel in public convence and most of them are cng fitted taxis,rickshaws and vagons, by this blackmailing of not providing the cng to the local residents of pakistan the cng owners have shown that they are greedy as when they were getting a high margin of profit over the locals they were happily selling cng and as now the honourable cheif justice has guided ogra to fix a reasonable profit margin of 10 per kg,the cng owners are not willing to sell it,the loss is all to pakistanis the poor people who earn their living by driving rickshaws and other public transport,thesepeople are suffering as they cant afford to run their transport on petrol as petrol is above 100 rs per litre,and then they dont have any other option left but to shut down their transport,no transport no income no income here comes depression and in depression mostly many people dont know what to do.the cng owners arent affected either they sell the cng on this price a 10 rs profit margin is very good. think about it as we the poor are suffering.