LAHORE: The price of compressed natural gas (CNG) jumped on Saturday to Rs184 per kilogram in Sindh and Rs123 per litre in Punjab — an increase of Rs15 per kg and Rs8 per litre, respectively.
The new rates notified by the CNG association came into effect on Saturday.
“The government procured liquefied natural gas (LNG) from the international market at very high rates because of on-the-spot buying of the LNG cargo,” All-Pakistan CNG Association Group Leader Ghayas Paracha told Dawn.
“However, the good thing is that the price will start lowering from the next month since the government would get two LNG cargoes each month from Qatar under a long-term 10-year agreement,” he added.
The other factors, according to him, that caused the surge in CNG prices included increased general sales tax (on LNG import) from five to 17 per cent, imposition of 5pc custom duty on LNG import and the fast increasing dollar exchange rate that has reached around Rs171.
“The aforementioned factors are behind the increase in CNG prices that are being revised each month,” Mr Paracha further said.
He said that in a recent meeting the association’s delegation, led by him, urged the finance minister to allow the CNG sector to import LNG in line with the decisions of the Economic Coordination Committee. “We justified our case well by explaining that there will be an impact of Rs82 billion on the import bill if we import at least 50 million cubic feet per day LNG under private contract directly,” he said.
“The minister was satisfied with our explanation and directed the departments concerned to resolve the issue,” Mr Paracha stated.
To a question, he said the government must exempt LNG imports from sales tax if it wanted to reduce the CNG prices. “We demand the government exempt the sales tax on LNG imports, like petrol and LPG, to ensure provision of the fuel at cheaper rates,” he remarked.
Published in Dawn, October 3rd, 2021