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Govt asked to remove cess on CNG sector

February 04, 2012

The National Assembly has recently adopted the resolution to withdraw recent hike in oil prices - File photo

ISLAMABAD: The CNG industry has demanded of the government to withdraw Infrastructure Development Cess (IDC) as the gas tariff for the CNG sector is higher than the gas tariff of all other sectors.

In this regard the National Assembly has recently adopted the resolution to withdraw recent hike in oil prices, the All Pakistan CNG Association (APCNGA) has written a letter to the petroleum ministry to review its decision of imposing IDC on the CNG sector.

“We have also requested the parliamentarians to take up the issue of hike in CNG prices on account of imposition of cess that should be immediately withdrawn,” APCNGA Chairman Abdullah Ghyas Paracha said.

He said that increase in CNG price had hit the commuters as 90 per cent public transport was using CNG.

The letter written to the petroleum ministry said that CNG industry was paying Rs699.20 per mmbtu in region I which includes Khyber-Pakhtunkhwa, northern Punjab, Islamabad and Balochistan while gas tariff for CNG in region II was Rs736 per mmbtu, which includes Sindh, central and southern Punjab.

“This tariff is higher compared to the other sectors as the gas rates for commercial clients is Rs600.19 per mmbtu, industry including captive power plants is Rs507.86 per mmbtu, power sector (Wapda/KESC) and Independent Power Plants (IPPS) Rs507.86 per mmbtu, cement industry Rs694.22 per mmbtu, fertiliser old plants Rs313.27 per mmbtu and fertiliser new plants Rs60.67 per mmbtu. Bulk domestic consumers pay Rs496.21 per mmbtu,” the letter stated.

“The cess on CNG sector should be withdrawn immediately to provide relief to the consumers,” Mr Paracha said and alleged that SNGPL staff was involved in supplying gas to the industrial consumers on load shedding days.

The Economic Coordination Committee (ECC) had approved a load management plan in November 2011 to supply gas to fertiliser plants on rotational basis that was not implemented and even gas supply was continued to fertiliser sector till end of December 2011.

“The industries was supposed to have suspension of gas for three months according to agreements signed with SNGPL, but they continue to get the gas supply,” he said, adding that as a result of such polices the domestic consumers too are faced with severe gas load shedding.

However, responding to the query an official of Petroleum Ministry said that gas was being supplied to industrial sector in violation of gas supply agreements as industry did not get continued supply of gas in nine months.