ISLAMABAD, Nov 29: While Prime Minister Raja Pervez Ashraf asked the petroleum ministry to resolve a dispute with owners of CNG stations to avert possible agitation, the Oil and Gas Regulatory Authority (Ogra) proposed an increase of over 17 per cent in the price of CNG on Thursday.

An official told Dawn that Ogra had forwarded the new pricing formula determined after a series of public hearings and talks with CNG station owners for a policy advice before issuing a notification.

The ministry has been informed that the new price has to be notified before Dec 5, the next date of hearing on the matter by the Supreme Court.

The owners, however, immediately rejected the new formula, saying it was not based on accounting principles and had been finalised in complete disregard of the court’s observations and a report of independent auditors appointed by Ogra itself.

Ogra informed the government that the formula had been worked out without any change in the rates of taxes, levies and the cost of gas approved by the federal government which could be changed by the petroleum ministry. On receipt of the policy advice from the petroleum ministry, Ogra would be in a position to notify the new CNG rates under Rule 13 of the CNG Rules within a day, it said.

The new CNG prices determined by Ogra envisage an increase of Rs10.56 per kg (17.13 per cent) to Rs72.20 from Rs61.64 for the Potohar, Balochistan and Khyber Pakhtunkhwa region and of Rs9.60 (17.72 per cent) to Rs63.76 from Rs54.16 for Sindh and the rest of Punjab.

Officials said Ogra had worked out the cost of compression at Rs5.46 per kg and renamed it as value addition.

An operating expense of Rs7.90 per kg has been allowed in addition to a fixed margin of Rs3.42 per kg.

The rate of Gas Infrastructure Development Cess has been kept unchanged at Rs13.25 and Rs9.18 per kg for the two regions and General Sales Tax at Rs11.08 and Rs9.40.

Ghiyas Paracha, leader of the All Pakistan CNG Association (APCNGA), said it had serious reservations over the price determined after three public hearings. The court, he said, had called for an acceptable price formula worked out in consultation with the stakeholders to provide relief to consumers to the extent of Rs20 per kg.

He said Ogra had not taken into consideration independent and forensic audit of CNG accounts and operations even though the auditors had been appointed by the regulator. A report of Ogra’s own technical team had also been set aside, he said.

Mr Paracha said Ogra had sent its determination to the ministry despite the fact that the court had asked it to take a decision on the matter independently.

He said the CNG association would not go on strike but electricity supply to over 300 stations had been disconnected because of their inability to pay their bills.

According to sources, a delegation of owners of CNG stations had called on the prime minister and sought his intervention to resolve the issue. They said

Prime Minister Ashraf had asked his Petroleum Adviser Dr Asim Hussain to mediate to resolve the issue because the government could not afford public protests ahead of an election campaign.