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Fuel prices being raised again

February 29, 2012

ISLAMABAD: Forgetting its earlier commitments, the government has decided to impose additional Gas Infrastructure Development Cess on the CNG, which would jack up the essential fuel’s price by around Rs5 per kilogram.

Indeed, a double shock may be awaiting the harassed citizens when they wake up on Thursday with the price of petrol raised to Rs97per litre and that of CNG to about Rs80 per kilogram.

Sources, in the petroleum ministry said the government had only imposed 60 per cent of the cess on CNG in January and the remaining 40 per cent is being levied from March.

After the three-day strike called by the CNG stations in January 2012, when the cess was imposed the secretary petroleum agreed that the cess would be reduced by 50 per cent for the CNG.

The government increased CNG rates by Rs8 per kilogram from January 1, 2012, later the following month the cess was raised by 10 per cent and on Monday, a tax was imposed on the cess.

The three main CNG associations of the country on Tuesday jointly wrote a letter to the petroleum ministry against the move to regularly increase the CNG prices.

The letter was signed by chairman CNG Dealers Association, Abdul Sami Khan, chairman CNG Owners Association Malik Khuda Baksh and chairman All Pakistan CNG Association Ghiyas Paracha.

The letter said, “We have come to know that government is planning to impose more cess & tax on cess on CNG sector. We all the associations of Pakistan CNG sector demand that the government should not impose any more cess and GST on cess for CNG sector. “All CNG consumers and CNG station owners will not bear this exorbitant increase in CNG prices. We shall not accept this decision.”

Talking to Dawn members of the ACNGA said it had been agreed between the petroleum ministry and the CNG stakeholders that the price of CNG would be around 55 per cent of petrol, but the government was bringing the prices of both fuels closer.

“The government is ignoring one simple fact that the people have turned to the CNG because it is cheaper an affordable, and we are saving huge foreign exchange by restricting petrol imports,” Mr Paracha told Dawn.

He said if there was massive increase in CNG prices it would result in high inflation for the whole economy. “All 3.5 million CNG user cannot afford to pay for petrol prices.”

While the CNG associations were gearing up for another round of showdown with the government the petroleum secretary Ejaz Chaudhri, had in the earlier round of meeting with the CNG associations had said that CNG was still cheaper by 55 percent compared to the price of petrol.

However, if the petrol is raised to Rs97 per litre and the CNG reaches Rs80 per kilogram it would still be cheaper by around 83 per cent of petrol price.