The February Saudi Aramco contract price for LPG soared to a record high of $1,028 per ton with an increase of $142 per ton compared to the prices in January. - File photo

ISLAMABAD: Backtracking from the commitments made by the petroleum ministry on January 3, the government on Tuesday notified 10 per cent infrastructure development cess on compressed natural gas (CNG) with effect from Wednesday.

After imposition of the cess, the new price of CNG will be Rs74.30 per kilogramme in KP, Balochistan and Potohar region (Rawalpindi, Islamabad and Gujar Khan).

The All Pakistan CNG Association criticised the move and said the decision was contrary to the agreement between the association and the petroleum ministry. Dawn

"We had stated this earlier too that higher tax rate on CNG is unfair as we are already paying the highest gas tariff and taxes," said Ghiyas Paracha, the chairman of the association, while talking to .

He said the government should also raise taxes on other sectors which were heavy consumers of gas.

After three days of violent street protests, the petroleum ministry on January 3 had agreed all the three demands of transporters and the association which were: reducing the gas development cess by 10 per cent, cutting the three-day loadshedding by eight hours and formulating regulations for the transport sector.

After the agreement, the Oil and Gas Regulatory Authority (Ogra) reduced CNG rates by 71 paisa.

Meanwhile, Secretary Petroleum Ijaz Chaudhry highlighted the rationales for increasing the prices back to the January 3 level during a meeting of the National Assembly standing committee on petroleum and natural resources on Tuesday.

He said the government had also planned to reduce prices of diesel to discourage the use of CNG but the plan could not be materialised. "We have an agreement with the CNG association to keep the prices at 55 per cent parity of petrol," he said, adding: "We will move a summary to the Economic Coordination Committee to revise this pricing formula."

The NA body was also informed that the total CNG consumption in the country was nine per cent of the gas demand compared to 27.7 per cent consumption by the power sector and 15 per cent by textile and other industries.

However, at the same time the secretary petroleum said a plan was under study to ban all private vehicles from filling CNG. "We can save 50 per cent gas being used in auto sector if private vehicles are banned from using CNG," he told the meeting.

Meanwhile, LPG prices are set to be raised by Rs15 per kilogramme due to an increase in the LPG rates at the international markets.

The February Saudi Aramco contract price for LPG soared to a record high of $1,028 per ton with an increase of $142 per ton compared to the prices in January.

Since the local LPG producer prices are indexed to the Saudi Aramco CP, the calculated increase would be Rs15,000 per ton to settle at around Rs107,000 per ton from February 3.

The LPG association demanded that the government should reduce petroleum levy for the benefit of the consumers.