CNG sector seeks urgent bailout package

Updated 07 Apr 2020

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Chambers caution govt of imminent economic losses. — Dawn/File
Chambers caution govt of imminent economic losses. — Dawn/File

ISLAMABAD: Compressed Natural Gas (CNG) station operators on Monday demanded support from the Prime Minister’s Economic Relief Package to avoid unemployment and business closure as a fallout of the coronavirus lockdown in the country.

The All Pakistan CNG Association (APCNGA) said the sector was collapsing due to the economic slowdown and needed an urgent bailout package. It said the CNG sales had plunged due to lower price differential following reduction in oil prices but the lockdown had virtually closed down CNG retail outlets.

“The government should move to save Rs450 billion of investment in the CNG sector which is also providing direct and indirect jobs to millions of people”, said APCNGA Central Chairman Ghiyas Abdullah Paracha.

In a letter to PM Imran Khan, Paracha said the reduction in oil prices had provided relief to masses but it had also minimised the difference in the prices of petrol and CNG which has halted the sale of environmentally-friendly fuel putting the entire sector at stake.

Chambers caution govt of imminent economic losses

We can only survive if the government allocates Rs100,000 monthly grant to every filling station for three months and announce other measures, he said.

The withholding tax should be reduced from existing four percent to two per cent, industrial power tariff should be allowed to the CNG sector and the Maximum Demand Indicator charges included in the electricity bills should be capped at 10pc, he added.

Meanwhile, he said the gas distribution and regassification charges should be brought down while gas infrastructure development cess should be abolished. Moreover, the association also demanded gas rates for CNG filling stations using local gas to be reduced by 35pc so that the business can become viable.

He also demanded waiver of 5pc customs duty on LNG imports so that its price can be brought down for consumers.

Paracha said the private sector can give excellent results if it is allowed to take part in the LNG supply chain since it has the ability and will to bring down LNG prices substantially to benefit the entire population.

He said the transport sector should be encouraged to use CNG to reduce urban pollution.

Steel production

In another development, the Pakistan Association of Large Steel Producers (PALSP) on Monday wrote a letter to the Sindh and federal governments demanding that their units be allowed to resume production.

The letter written by PALSP Secretary General Syed Wajid Bukhari referred to the special package for the construction sector adding that steel was the backbone of the construction industry and should be allowed to continue operations similar to the cement sector.

However, Bukhari said the government should at least allow those millers to resume operations who have labor colonies and residential arrangements for their workforce within their plant premises.

“In our well considered view, unless the government allows the steel sector to start production, it will be impossible for the construction sector to take up the construction projects,” the letter by Mr Bukhari.

“Any delay in opening up steel mills to start production could result in delaying the entire initiative of reviving the construction sector.”

Reopening of industrial units

Various industrial sectors and the Islamabad Chamber of Commerce and Industry (ICCI) on Monday called upon the government to allow reopening of businesses and industrial units to avoid a total economic collapse.

In a letter to the Adviser to PM Abdul Hafeez Sheikh, the ICCI demanded that the businesses should be allowed to operate from April 14 onward even for limited timings. The letter added that pandemic-led closures have caused serious business loss.

ICCI president also complained that the banks are not giving any concession in loan installments and mark up to businesses while payment against loans have also not been deferred.

Referring to PM’s decision of allowing construction industry to resume work from April 14, he said that rest of businesses should also be allowed to open for limited timings after taking proper protective measures.

He also highlighted the district administration’s decision to allow some businesses to provide services with protective protocols and demanded similar extension for other sectors as well.

ICCI president added that due to closure of industry, workers were idle but on our request, industrialists were providing them daily food items while workers were being rendered jobless.

“If lockdown continues for a long time, it would be impossible for industrialists to pay them [workers] monthly wages,” the ICCI president warned.

He appealed to the PM to give sympathetic consideration to the demand of businesses for deferment of bank loans and their markup for a few months.

Published in Dawn, April 7th, 2020