LITTLE by little, the government appears to be climbing down from the previous administration’s attempts to restrain the growth of the CNG sector.

The latest step in this direction is the approval of 30 licences for new CNG stations, even as the sector is gasping for its allocations of natural gas. The last government had imposed a ban on the issuance of new licences for CNG stations as the sector had grown rapidly, arguing that the dwindling stock of domestic gas was better utilised for power generation and fertiliser, as well as other industrial uses.

Those with licence applications pending when the ban went into effect were given provisional licences, and went ahead with their investments.

The Supreme Court ordered the government to settle the issue of those working under provisional licences, and the government obliged in January of this year by granting 20 marketing licences to those operating under provisional terms. This week the government has paved the way for 30 more to join the club of licensed CNG dealers.

Whether or not the licences ought to have been issued is a complicated issue. But what is not complicated is the growing shortage of the precious stock of domestic gas.

The ban imposed by the previous government has proven very difficult to uphold because the CNG business is a cash cow and there is constant pressure for grant of licence to favoured parties.

The pending issue of those with provisional licences, as well as the difficulties associated with attempts to ban the import of CNG kits and cylinders, highlight the struggle the state has had to wage to restrain the growth of this sector.

More recently, CNG dealers were allowed to import LNG once the infrastructure for doing so is in place, but without any clarity as to how pricing will work in that arrangement. The recent grant of further licences might well be justified according to the technicalities of the law, but this is an opportune moment to recall the good reasons behind why attempts to restrain the growth of this sector came into being in the first place.

The country cannot afford further increases in allocations to the CNG sector. Let us hope that the grant of licences this week is not a slippery slope back towards unbridled growth in the vehicular use of CNG.

Published in Dawn, October 17th, 2014