ISLAMABAD: With new price determination of natural gas, the Compressed Natural Gas (CNG) rates would also be increased next month, the sub-committee of Senate Standing Committee on Cabinet Secretariat was informed on Thursday.

Chairman of the sub-committee, Senator Shahi Syed noted that the GST on CNG was increased from 17 per cent to 34pc.

However, the officials of Sui Northern Gas Pipeline Limited told the committee that the decision was being made by the Federal Board of Revenue and Oil and Gas Regulatory Authority (Ogra).

The new CNG rate for Zone-I is Rs75.82 per kilogram. The break-up includes gas charges of Rs35.17 per kilogram, GIDC per kg at Rs13.24, electricity cost at Rs6, margins and operating expenditures at Rs12 while GST is Rs11. Potohar and Khyber Pakhtunkhwa fall in this zone.

For Zone-II, which includes Central and South Punjab, Karachi and Balochistan, the new CNG rate is Rs67.50 per kilogram, Senator Syed argued against the GST imposed on CNG. The GST is 5pc in Punjab, while 17pc in other provinces even though Punjab was being provided CNG from the re-gasified LNG, while the other provinces are getting locally produced natural gas which is cheaper, he said.

Chairman Ogra Saeed Ahmed Khan said gas tariff would be finalised next week.

“The prices will be determined on the basis of rates of all cargoes arriving between March 2015 to February 2016,” Mr Khan said.

The sub-committee was told the cost of locally produced gas is Rs887 mmbtu whereas the cost of LNG is Rs1,213 mmbtu.

As gas demand is higher in Punjab, imported LNG is being provided to the province.

Published in Dawn, February 19th, 2016