ISLAMABAD, Jan 3: Federal Minister for Petroleum and Natural Resources Amanullah Khan Jadoon on Tuesday stressed the need for local manufacturing of CNG kits within a year to cut the import bill and make the country environment friendly.

He made the remark at the first meeting of the cabinet committee on replacement of diesel by CNG.

The petroleum minister suggested a collective approach to achieve the above goals by involving all the stakeholders, especially the private sector.

The meeting emphasized that the provincial governments should gradually phase out diesel engine vehicles like buses, wagons and two stroke rickshaws in all major cities by the end of 2007.

It suggested that no permits be issued to diesel engine vehicles in the cities of Karachi, Lahore, Faisalabad, Peshawar, Quetta, Islamabad and Rawalpindi from 2007.

The committee was of the view that large CNG refilling stations for buses should be facilitated by ensuring supply of gas at suitable pressure.

It also called for promoting the induction of CNG buses during the diesel phase out period. The provincial governments should provide incentives to CNG buses such as lucrative routes, exemption from route tax, excise tax and registration fee.

The meeting appreciated the NWFP government for inducting 50 CNG buses on experimental basis in Peshawar.

It was also proposed that interest on loans to prospective buyers of CNG buses might be borne by the government on public- private partnership basis. The State Bank of Pakistan may advise commercial banks to establish line of credit for procurement of CNG buses and establishing CNG buses manufacturing facilities in the country, it added.

Hydrocarbon Development Institute of Pakistan (HDIP) Director-General Hilal Raza informed the meeting that Pakistan had become the leading CNG using country in Asia and third in the world.

As many as 835 CNG stations had been set up countrywide till December 2005. Another 200 stations were under construction and 850,000 vehicles were now fitted with CNG kits.

The CNG sector had attracted Rs20 billion investment and another Rs2 billion were in the pipeline. The sector is providing jobs to 16,000 people.

The meeting was told that 100,000 vehicles were being converted to CNG annually reducing the dependence on petrol fuel. It was also disclosed that Pakistan imported 7.1 metric tons diesel worth $1.7 billion last year.