ISLAMABAD, Sept 24: The average price of Compressed Natural Gas (CNG) rose by 65.36 per cent during the last two-and-a-half years (2003-05) and is expected to escalate further following the government decision to promote it as alternative source of fuel in transport and industrial sectors.

Official data available with Dawn indicate that the average price of CNG across the country increased to Rs28.38 per kg in September 2005 from Rs17.15 per kg in April 2003.

Finance ministry sources said that rising prices of gasoline in the international market had made CNG an affordable fuel for a majority of vehicle owners. However, the sources did not rule out the possibility of further increase in CNG prices following the cabinet decision to replace diesel with CNG in the urban areas as part of the Energy Conservation Plan.

The sources said that with the increase in consumption of CNG, the price also recorded a growth.

The government had started with a modest beginning of two refuelling stations in 1994, which now increased to around 736 stations across the country.

There are more than 750,000 CNG-fitted vehicles plying the roads, which ranked Pakistan as the third largest country operating CNG vehicles after Argentina and Italy, the sources added.

Pakistan has 26.8 trillion cubic feet (tcf) of proven gas reserves and currently produces around 0.8 tcf of natural gas per year, which is consumed domestically. The sources said that Pakistan’s demand for natural gas was expected to rise substantially in the next few years, with an increase of around 50 per cent by 2006.

The statistics showed that turbines of thermal power plants consumed about 44 per cent of Pakistan’s gross production of natural gas, while the transport sector used only two per cent where at present more than 750,000 vehicles are operating on CNG out of total of 1,400,000 vehicles.

“Even if we convert all gasoline vehicles to CNG, only 3.5 per cent of our gas production will be consumed in the transport sector,” the sources added.

Commenting on the cabinet decision, the sources said that even if the government converted all diesel vehicles to CNG, it would result in consumption of around five per cent of the total production of natural gas in the country. At present around 1,300,000 vehicles operate on diesel across the country.

The sources said that almost 80 to 85 per cent of natural gas was consumed by the industry and power sector. The sources propose that to arrest the constant rise in the CNG price, the government should think about importing natural gas from neighbouring countries like Iran, Turkmenistan and Qatar, which have sufficient reserves.