KARACHI: Stakeholders representing various associations have forecast Rs18-25 per kilo rise in compressed natural gas (CNG) price in the wake of an increase in gas prices by the government.
Consumers were already facing a burden of paying high CNG price following deregulation of CNG price in December 2016 when the price was Rs67.50 per kg while petrol at that time was available at Rs66.27 per litre.
After frequent upward price revisions from December 2016, the current CNG price is now Rs81.70 per kg while petrol is sold at Rs92.83 per litre.
“The CNG price will cross petrol price for the first time in country’s history, which will prove devastative for both stakeholders and consumersm,” chairman of the All Pakistan CNG Forum Shabbir Sulemanji said.
Estimating a big hike of Rs20-25 per kg increase in CNG price, he said the government should have consulted with stakeholders before giving the shock. Besides, the other way was to increase gas prices in phases.
He said a number of private vehicle owners had already switched over to petrol due to three-day gas loadshedding at CNG stations.
“Now more consumers will use petrol after finding no saving in using CNG. As a result, additional demand of petrol will emerge thus putting petrol import bill further under pressure,” he added.
He said CNG is 35-40 per cent cheaper keeping in view current gas price of Rs81.70 per kg.
The price difference will depend on the future petrol rate, but the cheaper source of fuel in shape of CNG will be negligible, he feared.
Central chairman of the All Pakistan CNG Association (APCNGA) Ashar Haleem said CNG price hike would leave the already troubled CNG sector unviable.
The sector already facing multiple problems would become unfeasible after the gas price hike thus wasting investment of Rs450 billion and leaving hundreds of thousands unemployed, he said.
The non-viability of the limping CNG sector would add to the oil import bill, increase the budgetary deficit and enhance environmental pollution.
The CNG sector is already paying more than any other sector for natural gas while an additional burden of 40 per cent on this sector will be unbearable as it will increase the price of fuel by Rs18-20 per kg, he added.
The price of gas for the CNG sector has been upward revised from Rs700 to Rs980 per mmbtu.
Increased price of the fuel would result in little difference between the price of gas and petrol thus depriving masses of economical fuel resulting in many problems including the high cost of transportation, he added.
He urged the government to protect the CNG industry from complete collapse in the larger interest of consumers.
Senior vice chairman of the APCNGA Samir Najmul Hassan said the saving aspect of 35-40 per cent through CNG would either go away or fall to 10 per cent in case CNG prices were raised up to Rs105 per kg.
“We have two ways — either to close down gas stations or implement new enhanced prices,” he said adding the association had started consulting its members to counter the government’s decision of raising gas prices.
He recalled that the government had encouraged people and stakeholders to invest in CNG on the assurance of keeping CNG price 40-50 per cent lower than petrol.
Former APCNGA chairman Ghiyas Paracha anticipated 40-50 per cent rise in transport fares.
Sindh consumes 85mmcfd of CNG, Khyber Pakhtunkhwa 65mmcfd and one mmcfd Balochistan. In Punjab reliquified natural gas (RLNG) is being used.
Published in Dawn, September 20th, 2018