KARACHI, Nov 7: The government is yet to come out with a clear decision with regard to SRO-38, allowing duty and tax exemptions to CNG dealers and station owners, which was due to expire on October 31.
CNG industry was anticipating a final decision in the last two meetings of Economic Coordination Committee (ECC), but no announcement was made.
“It is not clear whether the SRO-38 is expired or the stakeholders will still import kits, cylinders and other machinery duty free,” general secretary, CNG Dealers Association, Aamir Ahsan Thanvi told Dawn.
Investors, who had planned to install CNG stations, have put on hold their future plans till the government takes any decision.
The SRO-38, under which stakeholders had been enjoying duty and tax exemptions since the last five years, has expired on October 31, 2002.
He said the fate of 700 investors, who were issued licence for setting up CNG stations, now hangs in balance.
CNG dealers had held several meetings with the government officials prior to October 31, urging them for another five-year extension. The government was actually considering to impose 10 per cent import duty and 15 per cent sales tax on CNG related items from November 1, 2002 following expiring of SRO-38.
Thanvi said only 20 per cent CNG stations have been established so far in the country, while 700 CNG licence granted are in the pipeline.
In case SRO-38 is not extended, the cost of investment in setting up CNG a station will increase. Besides, a 15 per cent sales tax will also be levied on the conversion cost to CNG for a vehicle. As a result, conversion centres will be asked to collect 15 per cent sales tax on vehicle conversion to CNG. The conversion cost will also go up to Rs 28,750 as compared to Rs 25,000.
As decision on SRO-38 is still awaited, the CNG industry has received another jerk following the increase of 1.63 per cent in gas prices by the government from October 25.
The secretary general said the CNG dealers had met the officials of the three leading oil marketing companies (OMCs) to decide the price hike of CNG and a decision is expected in a week.
After the increase of 1.63 per cent in gas prices, CNG prices will rise by 25 paisa per cubic metre to Rs 17.75 per cubic metre.
Chairman CNG Dealers Association, Abdul Sami Khan said on one hand the government wants to boost CNG culture to cut oil import bill but on the other hand, it intends to impose duties and taxes and raising gas charges. In case the price difference between petrol and CNG narrows down, CNG will lose its charm, he added.
