KARACHI, Oct 3: The imposition of 15 per cent sales tax on CNG kits and 10 per cent import duty on cylinders from November 1, 2002 will burden the consumers to pay Rs4,000-7,000 more in conversion of vehicles from petrol to CNG.

Besides, the current investment level of Rs13 million (without the price of land) is needed for setting up a CNG station will go up to Rs20 million following lifting of exemptions on compressors, dispensers and other equipment from November 1.

This was stated by the chairman, CNG Dealers Association, Abdul Sami Khan at a press conference on Thursday.

He said the levy of sales tax on CNG kits and import duty on cylinders will discourage vehicles conversion from petrol to CNG to a great extent.

He urged the government for the extension of the SRO 38, which is expiring on October 30, for another five years. The SRO 38 was issued in 1998 allowing duty-free import of CNG equipment besides giving exemptions of sales tax on kits and cylinders.

Sami said only 242 CNG stations are operating in the country and the government has issued no objection certificates (NOCs) for setting up 700 more stations. “In case the extension in SRO-38 is not made, the entire CNG industry and investment of billions of rupees will go to waste,” he said.

He said that the popularity of CNG is growing fast since the demand of petrol has declined by at least 25 per cent due to persistent increase in prices by the oil marketing companies.

He said CNG costs Rs14.87 per litre as compared to Rs34.75 per litre of petrol.

Besides this problem, CNG dealers have many more grievances. He said persons who got licence to set up CNG stations at their existing petrol pumps before April 2002 should be exempted from the KBCA/KDA rules to acquire 600 yards plot for setting up CNG stations.

He termed Oil marketing companies demand of up to 15 per cent share from the CNG stations’ monthly income unjustified and unfair.