ISLAMABAD, Jan 1: The Oil and Gas Regulatory Authority (Ogra) increased by up to 21.4 per cent the price of for compressed natural gas (CNG) on Tuesday. But the revised price was immediately rejected by the All Pakistan CNG Association which said it would announce a protest plan within two days.

The gas supply to CNG stations in Sindh, Khyber Pakhtunkhwa and Balochistan has been restricted to three days a week while in Punjab the supply has been severely disrupted by the Sui Northern Gas Company to meet the requirement of domestic and industrial sectors.

The price increase was announced by Ogra chairman after meetings of the Economic Coordination Committee of the cabinet led by Finance Minister Dr Abdul Hafeez Shaikh and its sub-committee headed by Law Minister Farooq H. Naik. After clearance by the ECC, the Naik committee approved policy guidelines on CNG pricing and provided it to Ogra for price calculations.

Ogra chairman Saeed Ahmad Khan said the price for region-I (Potohar, Sindh and Balochistan) had been increased by Rs12.80 per kg to Rs74.44 – 20 per cent.

He said the retail price for region-II (Punjab and KPK) had been increased by Rs11.62 per kg to Rs65.78 per kg – 21.25 per cent. Ogra has formally issued a notification to the effect.

Mr Khan said that CNG stations had been allowed an operating cost of Rs5.20 per kg, electricity expenses at Rs7.22 per kg and profit margin of Rs4.32 per kg.

Prime Minister’s Adviser on Petroleum and Natural Resources Dr Asim Hussain said the prices had been fixed by Ogra on the basis of ECC-approved policy guidelines. He said APCNGA had consented to the margin and value addition costs during proceedings of the sub-committee of the ECC but had disagreed on the operating cost.

He said the CNG stations were earlier enjoying over Rs20 per kg operating cost which had now been reduced to Rs16, adding that APCNGA’s demand for equalising prices in two regions was genuine which would be looked into subsequently in the light of observations of the Supreme Court.

He said the profit margins earlier enjoyed by CNG owners could not be allowed anymore, adding that neither the Supreme Court had given such instructions nor he would ever agree to such a hefty profit.

The APCNGA leader Ghayas Abdullah Paracha said the new price was not acceptable to the industry, adding that their point of view was heard by the committee but not accepted. “The pricing formula is illogical, illegal and against the interests of the CNG sector,” he said.

As a first step, the APCNGA will challenge the controversial decision in the Ministry of Petroleum and Ogra and then announce a schedule of protests to get its demands accepted. He said the pricing decision was one-sided and irrational in which demand for uniform gas prices and taxation as well as right to a just profit margin had not been accommodated.