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New tax on CNG planned

Published Nov 29, 2012 02:43am

—File Photo

ISLAMABAD: The government is considering to impose a new tax on compressed natural gas to reduce the price difference between CNG and petrol in order to phase out the use of the gas in private transport.

“The government has planned to phase out CNG stations gradually as they are causing heavy loss to the national economy by wasting this valuable commodity (natural gas), instead of its use for industrialisation and investment and domestic use,” Prime Minister’s Adviser on Petroleum Dr Asim Hussain told the National Assembly’s Standing Committee on Petroleum on Wednesday.

The country does not have sufficient or surplus gas reserves to allow it to be burnt in private and luxury vehicles.

He said the government wanted to set equitable prices for all fuels and allow only a reasonable profit to owners of CNG stations.

He said the CNG should only be used by public transport and private vehicles should be discouraged from burning the cheaper fuel.

To achieve this goal, he indicated imposition of a new tax but did not give details.

The committee headed by Muhammad Tariq Khattak asked the petroleum ministry to come up with a solution by Dec 5 and play the role of a mediator between the CNG station owners and the Oil and Gas Regulatory Authority (Ogra) in fixing a reasonable price to mitigate people’s difficulties.

It expressed concern over closure of CNG stations and the disagreement over the pricing mechanism.

Dr Asim said Ogra had failed to play the role of a regulator. The government increased the wellhead gas price to $6 which boosted exploration work and 40 rigs were operating in the country. He said 30,000 barrels of oil from Khyber Pakhtunkhwa would start flowing into the national system by March next year.

He said the department of explosives that granted no-objection certificate to CNG and petrol stations was under the industries ministry where officials received bribes to issue laboratory certificates. The petroleum ministry, he said, had initiated a legislation to bring the department under its control.

The parliamentarians expressed concern over recent explosions in CNG-fitted vehicles and wondered what role the department of explosives and the Hydrocarbon Development Institute played in allowing substandard cylinders.

The members said that while Ogra and the station owners were taking extreme positions, the consumers were forced to spend a major part of their day in long queues to get CNG.

Some members called for a national debate to determine if there was sufficient gas available for vehicles or it should be used only for value-added sectors so that a clear roadmap could be followed and confusion and people’s difficulties removed.

MNA Rana Afzaal Hussain said the CNG Association had become a cartel and minted millions of rupees at the cost of people. He wondered why 100 per cent profit was promised in the agreement the government had reached with the CNG sector in 2008.

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Comments (16) Closed

khalid gaba
Dec 04, 2012 02:20pm
a move in a right direction :)))))))))
Waqar Ahmad
Nov 29, 2012 06:09am
Gas should be provided to home user on priority, A more sophisticated way would be a ban on installment of CNG kits in heavy and luxury vehicles. CNG kit should only be allowed in Cars having engine power below 1300CC
khalid gaba
Dec 04, 2012 02:20pm
itz awl wastage of tme
Nov 29, 2012 03:44am
Why doesn't the Government get rid of the protocols like fleet of 20 cars for ministers and stop finding ways to finance Luxurious Government life style.
Nov 29, 2012 04:09am
Govt. spending huge amount on import of Fuel and very few people are making money on import, I would request the Govt. to discrage the import of fuel and use the money on exploration of natural gas that will help our economy to boots and also prevent the environment.
Nov 29, 2012 04:10am
Nov 29, 2012 04:26am
Zardari's team is pathetic. This Government is hiding the fact the the crisis on the CNG is due to the lack of availability of the CNG gas and due to the lack of resources to drill the gas. They did not plan anything to cope up with the growing demands of the public in the coming years. If they will increase the gas prices this time again, all the economic hub will be effected. Inflation will rise again. CNG should have been reduced to small vehicles only by not increasing tariffs. Tariff increase will be another big burden on the public and another big blow to the governments performance. It is ideal to do more to source more CNG than to increase tariff. It will not help.
Najma Rafique Ansari
Nov 29, 2012 12:51pm
When Gen Musharraf was at the helm of the affairs there wasn't any shortage of anything. Now PPP after five years loot and plunder considers to deprive the people of Pakistan from their fundamental rights. Its all nonsense, the worthy petroleum minister is requested to eradicate poverty and not poor.
Nov 29, 2012 08:27am
If CNG only for public transport being suggested, how can be ascertained the real beneficiaries are general masses and not to transporters.
atif khan
Nov 29, 2012 05:34am
advise to GOV, open tea stalls all over pakistan to generate funds to run this country, why just rely on cng and petrol business.
Jamshed Khan
Nov 29, 2012 08:39am
Taxation is only good when it benefits the people of the land. Money raised from this new tax is only likely to end up supporting the already luxurious life style of our rulers. As a result of this proposed tax, prices of everyday goods will go up and the hardship will increase. But I don't think we expect our rulers to have the morals to think that far ahead.
Nov 29, 2012 08:07am
a move in the right direction
Nov 29, 2012 07:20am
Good with enforcing such a rule in this country.
Yasir Mansoor
Nov 29, 2012 09:20am
How can just a glass of water(25%GST imposed on CNG) be enough to satisfy the needs of all the Govt. Employees!
Nov 29, 2012 07:21am
Good luck I mean.
waseem ali
Nov 29, 2012 07:21am
this suggestion to be practical and must be implemented .

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