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Motorists queue up for CNG in Islamabad. - File photo
Motorists queue up for CNG in Islamabad. - File photo

Though the government never announced CNG supply closure publicly, motorists feel that they would have no option but to run on petrol for good.

The past week witnessed an extraordinary rush of vehicles at petrol stations as there was no compressed natural gas (CNG) supply and even not enough petrol.

The crisis emerged when the vehicles running on CNG were left with no other option but to opt for petrol thanks to unavailability of the cheap fuel.

But as the motorists reached the filling stations to fill their tanks with petrol, the latter had no sufficient stock to meet the rising demand. Though the petrol shortage was overcome within about 24 hours, the CNG shutdown appears to be a permanent phenomenon.

“The gas supply to CNG stations in Punjab is expected to remain suspended during January because of the high domestic demand caused by the low temperature,” said Amjad Latif, a senior official of the Sui Northern Gas Pipelines (SNGPL).

However, the government decision to close the CNG supply in January has not yet been publicly announced. But consumers have begun sensing what the government had in store for them and many vehicle owners have got ready to drive without CNG.

“Every day we get two or three vehicles whose owners want them adjusted for optimum petrol consumption. A car that is equipped to run on the CNG consumes a lot of petrol,” said Amjad Hussain, a mechanic at the I-9 auto-market. The adjustments are being made as consumers realise that their cars will now have to run on petrol for most of the time, he added.

The shortage is the latest in the ongoing CNG saga that took a turn for the worse when the government decided in July 2012 to link the prices of CNG with that of petrol.

Under the law, gas prices are supposed to be determined biannually after a public hearing by the Oil and Gas Regularity Authority (Ogra).

However, the government disregarded the law and after July continued to raise the CNG prices till the Supreme Court took a suo motu notice of the issue.

On October 25, during the hearing of the suo motu case, the apex court directed the Ministry of Petroleum to reduce the CNG prices that had reached Rs92 per kg in the Potohar region, including Islamabad and Rawalpindi.

Dr Waqar Masood, the petroleum secretary, told the apex court that as a temporary relief the prices would be brought down by Rs30 per kg.

Accordingly, Ogra issued a notification setting the prices in Region 1 (Potohar, Khyber Pakhtunkhwa and Balochistan) at Rs61.64 per kg and in Region II (Sindh and areas in Punjab excluding Potohar) at Rs54.16 per kg.

The secretary also told the court that an entirely new mechanism was being worked out to set the prices which would replace the existing arrangement that had been in place since 2008.

But the new rates as announced by the secretary before the apex court reduced the profit margin of the CNG sellers who promptly went on an announced strike, claiming selling the cheap fuel was no longer a profitable business.

The real impact of the unannounced strike by the CNG operators began to surface from October 30 when the citizens returned from Eidul Azha holidays to find that almost half of the stations were closed.

It is difficult to assess whether the decision to partially shut down supply was dictated by the CNG association or individually.

But the consumers had to wait for hours in long queues at the filling stations.

As the closure of most of the CNG stations created hardship for the public, Dr Asim Hussain, the adviser to the prime minister on petroleum, said selling CNG was still profitable.

“Those who know business are operating and those who want to play politics are manipulating the situation,” he observed.

On the other hand, the All Pakistan CNG Association said only filling stations with low operational costs were managing to operate at minimal profits.

“Those stations which are not on rented land and their overhead charges are less can survive with this unrealistic formula,” said Ghiyas Paracha, the chairman of the association.

As per the decision of the Supreme Court that the petroleum ministry and Ogra needed to devise a fair CNG price, Ogra after its public hearing on November 14 inferred that the price needed to be fixed at Rs74.20 in the region I.

Whereas the independent auditors hired by Ogra in their report presented to the court on November 17 suggested that the CNG price in the region I should be Rs83 per kg.

As a result, Ogra announced its decision to hold another series of public hearing to also take the stakeholders in Karachi and Lahore on board which ended on November 29.

Before any decision could be made, the petroleum ministry sought time from the Supreme Court saying comprehensive gas policy guidelines were being formulated.

Dr Asim Hussain also told the media on December 4 that policy guidelines on the CNG usage were being formulated.

“The use of CNG will be restricted to public transport vehicles and up to 1,000cc cars,” he added.

However, after passing though various stages, the federal cabinet in its meeting on January 3 decided to form another committee to look into the policy guidelines.

The committee is headed by law minister Farooq H. Naek and includes federal minister for capital development and administration Nazar Mohammad Gondal and minister for climate change Rana Farooq Saeed Khan.

As the government failed to come up with a pricing formula, the CNG sellers did not resume full operation till late December when it was decided that gas could not be supplied to the stations due to heavy domestic demand in the wake of the cold weather.

However, when asked why such a decision was taken in the last year of the government, Dr Hussain said the CNG shutdown was necessary due to massive gas shortfall in the country.

“We are already facing a shortfall of around two billion cubic feet daily (BCFD), as the production is around 4.2 BCFD. There is always a time to take tough decision.”

He expressed confidence that the measure to enhance local production and import gas and LNG would start yielding results in 2014.

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Comments (12) Closed

Faqi Jan 07, 2013 01:52pm
PPP's agenda is to confine people at their homes without gas, mobile connections, electricity or any basic necessity of life!
Immad Jan 07, 2013 06:54am
Everyone thinks about one's own motives and thats understandable. Its government's duty to make decisions in the greater national interest without any bias e.g., to prioritize the Natural Gas supply to certain sectors. Of course if the greater national interest is power sector then the fertilizer, CNG and other industries might need to suffer but for the greater national interest. Government seriously lacks the trust people can put in for the government to make better decisions and that is for obvious reasons. And in this case either government did not act at all or acted late with a lot of bias.
Sandip Jan 07, 2013 07:24pm
Why is government in business of fixing price. Market should govern the prices as it happens in other countries. Government should control prices by taxation.
Sam Jan 07, 2013 02:05am
Karachi have no CNG or petrol issues.Karachi have plenty of CNG, petrol and gas supply.
Nadir Ali Khan Jan 07, 2013 10:06am
CNG stations are shut, there is no gas for domestic consumption. Petrol stations don't sell petrol for more than a 1000 ruprees. So where does one go and what does one do. To make matters worse, loadshedding has also reared its ugly head once more, with power outages of 2-3 hours at a stretch even in high end areas like Lahore Cantonment. After all these major fiascos, the PPP still talks about being re-elected. Hah!!! Oh please whoever makes such a statement needs to have his/her head examined.
Pervez Jan 08, 2013 06:00pm
Just look at the education of the rulers. You will have your answer
Pervez Jan 08, 2013 06:02pm
Well if you don't have electricity you and your children will suffer in terms of education. If you cannot travel you will suffer in terms of physical communication. Ahhh what better way to enslave the masses and ensure the survival of the handful of families. But this is the foundation of revolutions. Long overdue in pakistan.
Pervez Jan 08, 2013 05:59pm
Pathetic inept government led by uneducated bafoons who have no interest in making pakistan better. I travel a lot to third world countries and I assure you there is no country like pakistan that cannot produce electricty and cannot understand the demand of fossil fuel so there is enough available in the market. How inept is our country? No wonder the British ruled us for two hundred years.
Noor Jan 07, 2013 08:48am
We need to look at the bigger picture here. Is CNG for vehicles more important or GAS for homes and the industries that enable these homes to run. There needs to be a check n balance on how cars are allowed to be converted to CNG and how it impacts the overall gas reserves. There is a gas shortage in a nation that is rich with GAS reserves. We need to be more responsible towards our reserves. The key is to first prioritize and then distribute GAS with a check and balance. With the current mess and unchecked supply no one knows where we are headed.
Pervez Jan 08, 2013 06:03pm
But they will get re-elected because its not Islamabad and people if pakistan decide the elections it's Washington. Who said we are free
Imran Jan 09, 2013 05:44pm
I just cannot understand that why do not the government take some appropriate actions to reduce the shortage rather than saying that the gas is not available.
Ahmed khan Jan 12, 2013 06:12am
There is no such thing as "government" or "rit of goverenment" in this country. There is no such thing as "democracy" or "right of people in this country". these are a bunch of feudals, capitalist, industrialits commonly called dacoits. here is the real story of CNG. A few months back the Govt issued liscenses for LNG to its favourite businessmen. to make a windfall profits through LNG sales the government is purposefully creating a shortage of CNG. In a few months ahead Govt will launch a plan and virtually shut the CNG sector. Again the poor man has to suffer. Our pockets are being looted by these dacoits through democracy. Same is the case for all other commodities like wheat, Sugar, Petrol, Diesel etc. Congratulations to the "revenge of democracy" !!!!! Wake up Pakistan before its too late!!!!!!!! A Patriotic Paki