ISLAMABAD: The government seems to have no interest in seeking an end to a tussle with the owners of CNG stations over prices because of an expected serious gas shortage for domestic sector.

“If CNG stations become fully operational, millions of domestic consumers won’t be able to prepare breakfast,” a senior government official said while talking to Dawn.

“The prevailing situation suits us,” he added.

He said the ministry of petroleum was working on a policy to stop private vehicles beyond 1000cc from using CNG to reduce gas consumption in transport sector. The use of CNG would be restricted to up to 1000cc cars, rickshaws, taxis and public transport, he said.

The official said even three-weekly holidays for CNG sector had not helped in ensuring uninterrupted gas supply at reasonable pressure to domestic consumers.

“We have to choose between cooking food and running luxury cars on cheaper fuel,” he added. He said no complaint of low gas pressure had been received from domestic consumers since a majority of CNG stations were closed in the last week of October.

He said a meeting of the federal cabinet next week was likely to discuss the CNG phasing out policy and issue policy guidelines to the Oil and Gas Regulatory Authority (Ogra) on gas pricing.

Gas consumption by transport sector had to be discouraged by all means, the official said, adding that the government would increase taxes on CNG to reduce price differential with petrol.

The plan to increase taxes on CNG would also be presented to the federal cabinet next week, he said.

Ogra Chairman Saeed Ahmad Khan told reporters on Friday that the price issue could be resolved before Dec 17, the next date of hearing of the CNG case by the Supreme Court, if the government issued policy guidelines on prices by then.

He said Ogra had convened a meeting with CNG station owners on Dec 11 on the directive of the apex court. The court had asked Ogra to hear the point of view of CNG station owners to resolve the price row.

OGRA CONFRONTS GOVT: In reply to a question on the government’s move to charge higher system losses to consumers, Mr Khan said the authority was not bound to implement the government’s guidelines if they were not consistent with the Ogra Ordinance.

Ogra, in consultation with gas utilities, had launched a programme for reduction in unaccounted for gas (UFG) losses under which such losses should have been brought down to four per cent by now, the chairman said.

Ogra had allowed 4.5 per cent losses to gas companies, but could not allow them to make honest consumers pay for stolen gas, he added.

Saeed Ahmad Khan urged the gas companies to curtail theft by penalising consumers guilty of gas theft instead of passing on the burden to honest ones.

Ogra had not allowed the Sui Northern Gas Pipelines Limited (SNGPL) and the Sui Southern Gas Company (SSGC) to recover from consumers Rs7.1 billion and Rs2.4bn respectively on account of gas theft in 2009-10.

Next year, he said, the SNGPL and SSGCL were not allowed gas theft recovery to the tune of Rs6.3bn and Rs3.3bn, respectively.

He said the SNGPL’s gas theft amount had risen to Rs14.2bn but it could not be passed on to consumers.

He rejected as unfair the demand made by the gas companies for permission for seven per cent UFG loss recovery from consumers and support to it being extended by the petroleum ministry.

Mr Khan said the authority was an independent regulator under the Ogra ordinance of 2002 and it was not bound to accept policy guidelines not consistent with the ordinance that allowed only prudent cost recoveries from consumers.

Answering a question, the Ogra chairman said the regulator had opposed fixation of oil prices on fortnightly and weekly basis.

To another question, he said Ogra had imposed Rs550,000 penalty on the SNGPL for violating its obligations required under its licence but it had been challenged in court.