ISLAMABAD: All Pakistan CNG Association (APCNGA) on Wednesday threatened to shut down all Compressed Natural Gas (CNG) filling stations across the country and launch a movement, if the government did not reduce gas prices for consumers, including the CNG sector.

Addressing a press conference, held at the National Press Club, APCNGA Chairman Ghiyas Abdullah Paracha said that a 45pc reduction in gas prices was possible, under the present gas pricing formula.

“People are being deprived of low gas prices for two months. The government should cut prices of gas immediately,” he said.

He said: “Gas price could be reduced from Rs6,377 per million British Thermal Unit (mmBtu) to almost Rs318 per mmBtu, if the present gas pricing formula is applied. Reduction in gas price will save billions of rupees on a daily basis, stabilise the economy and put the crisis to rest,” he said.

The APCNGA chairman insisted that the government should reduce it as soon as possible.

“A meeting of the APCNGA central executive finalised recommendations and a working group was formed. It was decided in the meeting that all the CNG stations across the country will be closed and a movement will be launched along with representatives of other industries, if gas prices were not reduced for the CNG sector and all other consumers. Ogra has fixed gas price at Rs637 per (mmBtu) for all consumers in which Rs541 is the cost of gas while Rs96 is for transportation, profit, losses, and theft, etc.,” he said.

“The highest share in expensesis that of unaccounted for gas [UFG] which is from 6.5pc to 11pc. Gas price is linked to the price of crude and High Sulphur Furnace Oil (HSFO) in the international market.There are almost 48 gas wells in the country.

“Almost 20 wells that were operational before the year 2000 are linked to crude while almost 28 wellheads are linked to HSFO. The average price of crude was $61 in May 2019 while the US dollar was available at around Rs150. The price of HSFO was almost $391 per ton.The dollar during May 2020 was available at around Rs160, hence crude slipped to almost $37 while the price of HSFO fell to almost $150. Crude was almost 40pc cheaper and HSFO was 50pc cheaper,” he said.

“Reduced gas rate and abolishing unjustified subsidy can reduce CNG tariff by 75pc. Petrol price has been reduced by 38pc from Rs117 to Rs72; gas prices can also be reduced by 60pc in Sindh, KPK, and Balochistan. This will make CNG 40pc more economical as compared to petrol,” he said, adding that the private import of liquified natural gas (LNG) will provide gas at economical rates to masses in Punjab. “Some companies want to continue their monopoly. Inexperienced, incompetent, and driven by personal interests want to destroy the gas sector and LNG chain.”

Terming prices of LNG high in the country, he said that presently LNG was available at the cheapest price in the world but local consumers were paying the highest price in the world.

He asked the government to allow the private sector to import LNG at their own risk so that masses could benefit from reduced prices of LNG in the international market.

Published in Dawn, June 4th, 2020