ONE of the many CNG stations in the city.—White Star
ONE of the many CNG stations in the city.—White Star

KARACHI: The charm of saving in terms of rupees by running vehicles on compressed natural gas (CNG) has almost become irrelevant for owners of vehicles after a drop of Rs35 per litre in petrol price over the past two months, CNG stakeholders claim.

Three months ago, CNG was considered at least 30 per cent cheaper than petrol in running vehicles.

Petrol price has now become more attractive for people and further cuts in its rate will shift more consumers towards petrol.

Suspension in plying of public and school transport coupled with shrinking private transport movement owing to lockdown and closure of many industries and offices from last week of March till to date have played havoc with CNG sale, the people connected with CNG business added.

Jobs situation in CNG sector

However, conflicting claims have emerged over job situation at CNG outlets as one group of CNG stakeholders claim loss of 50 per cent jobs while other group rejects the stance.

Chairman of the All Pakistan CNG Forum Shabbir Sulemanji said pumps had employed people in two shifts and closure of pumps and massive drop in sales had made 50 per cent of workforce redundant. It means one shift is now almost jobless, he added.

Giving an example of sales, he asked how a pump could survive when it was hardly selling 250 kilo of gas a day as compared to 1,000-1,500 kg during April and over 3,000 kg a day ahead of lockdown.

As school vans and public transport are already not turning up for over a month at filling stations, the movement of people has confined to their homes after 5pm, he said adding that marriage ceremonies, parties and functions had already been discontinued ahead of Ramazan and no iftar dinners and other religious gatherings were being held.

Despite ease in lockdown and opening of some factories and shops, the CNG sales are still very low if compared with pre-lockdown situation, he said.

Mr Shabbir added that after the reduction in petrol prices on June 1, people would further lose hope in CNG resulting in more depressed sales in May.

“The government should restore tariff of 980mmbtu for CNG stations as compare to current 1,283mmbtu. This will bring down CNG price and may help pull more buyers due to low price,” he said adding that it looked strange that CNG price was higher when world crude oil, finished oil products and gas prices were falling in world market due to low consumption.

“Huge investment of CNG stakeholders in opening of CNG outlets, transporters’ and consumers’ expenses in fitting CNG kits and cylinders in vehicles are now at stake,” he said.

Samir Najmul Hassan of the All Pakistan CNG Association said, “Saving in terms of running vehicle on CNG is now hardly five per cent, which does not augur well for price conscious consumers.”

Predicting a doomsday scenario for CNG sector in case of further crash in petrol prices, he said some 40 pumps out of 350 in Sindh had suspended their operations as they could not afford in meeting expenses of salaries of workers amid declining sale.

“Amid tight business environment, our members have still not removed any employees of the pumps,” Samir claimed.

He urged the government to bring down gas tariff by 300mmbtu so that the CNG sector could survive. “This would definitely boost sale of the gas.”

CNG is currently sells at Rs123 per kg.

In February 2020 petrol was priced at Rs116.60 as compared to current rate of Rs81.58 per litre, as Rs35 has been reduced in per litre price.

Published in Dawn, May 18th, 2020

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