Associations are the worse monopolies in Pakistan

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None of us have ever witnessed worse scenario of a government being powerless against the monopolists who pursue nobody’s but their own interest and the government, who is responsible to pursue people’s interest is literally powerless even after all the power given to them by us.

In Pakistan, associations are the worse monopolies.

The mile long queues of cars to fill up their CNG from few of the stations who denied the All Pakistan CNG Association (APCNGA) call to shut down their pumps, have now been shut down for 48 hours starting from 9 am Wednesday to 9 am on Friday to observe CNG load-shedding holidays.

But since Sunday, 25th of November, CNG station owners had shut down their pumps saying that they were incurring significant losses at the current price scenario.

Earlier, the audit firm in charge of evaluating the pricing mechanism of CNG prices had said that the that compression and operational expenses validate the previous prices.

However, motorists who were protesting at M.A. Jinnah road were furious at the owners saying that there are more then 3000 CNG stations across the country which in itself is an indicator of the profit margins associated with this business.

Further adding that the unprecedented liberty given to CNG station owners is the chief cause of the crisis and should be tackled with an iron hand.

The CNG association said that the station owners were ready to give up their licenses if their demands are not met.

While, officials of OGRA and CNG association were to meet today in a public hearing to find a conclusion to the worsening situation which has been the cause of the disappearance of public transport from the roads as most of it now runs on CNG although it sets fares on the prices of Diesel.

Associations are the worse kind of monopoly in Pakistan and new laws have to be made to govern them as too much power lies in their hands, the power to suspend service is the worse.

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18 Comments
  1. M.l. Ali says

    These CNG stations make massive amounts of money. I had one CNG station as a client and while reviewing its Gas Bills and Bank Statements the profit margin turned out to be 33-40%. Not only do they make such exuberant profits they also cheat out on their income taxes as they prepare understated accounts for submission to FBR. We are talking about understatement of almost 50% in revenue and profits.

    However I will not blame the CNG stations for their high incomes as OGRA and SNGPL are to be blamed here. They fix the purchase and selling price of CNG for the stations. One with an ounce of common sense can very easily deduce here that the ownership of most CNG stations would definitely have links to people sitting in OGRA and SNGPL. No wonder they are proactive in reverting back the prices of CNG.

    Its about time these CNG stations ended with their profitability spree by ripping off the common man. I hope a probe is conducted into this issue.

  2. Mohsin Ihsan says

    cng stations ko bomb say orana chahyay..inko harwaqt aik masala hota hay jo avam ki pareshani ka sabab banta hay..na rahay ga station na rahay ga masala.

  3. Waqas A Khan says

    Govt should announce once that are we going to use Cng or not atleast.. we can be calm like k ab petrol hi hai we have to use it no other options….

  4. A Rehman Qureshi says

    FYI. CNG service will be resumed tomorrow…

  5. Yasir Mansoor says

    First of all the auditors who were hired were neutrals. they are amongst the 5 Biggest auditing firms of Pakistan, of which 2 best were chosen to audit the cost of CNG…Before you think, Yes, I am a Petrol Pump Owner… Let me tell you an easy calculation, I will try my best to scan every bill and daily register so that I post it to a thread very soon!

    @ 54/KG this is what we are earning!
    A normal CNG Pump Sells around 90,000 KG/Month.
    We Purchase Gas at Rs.49/KG and then we sell it at 54 that makes Rs.5 Cost to operate!

    In my pump daily loadshedding is about 6 hours, 45 Minutes!
    which sums the generator cost to Rs.12000 every day + The daily Wages which amounts to max 3000 for the whole employees so it sums up to 15000 expense per day..

    90,000 Total KG Sale * Rs.5 = Rs, 450,000.
    We run CNG for 24 Days in a month over here in KARACHI so, 24 Days Multiply by 15000(daily expense)=360,000!
    which makes 90,000 Gross Income.

    but that's not the net income,
    Electricity Bill, I know you won't trust me but it costs minimum of Rs. 350,000

    so…90000-350,000=260,000 Loss Every month!

    But still we tried our best to Run our CNG Station as much as we can, OGRA says there's no such thing as loadshedding!

    Guys please Media ke ghulami se nikal aoo aur please thori si apni aqal lagao ge tou koi bhi loss bardasht nahi karsakta apne business mein…

    There's no such thing as CNG MAFIA, We are just incurring huge losses, that's why we are completely unable to sell it any further…

    IF you really want to stand up then Protest against GOVT who is buying it at Rs.17/KG and wholesaling it at 49 Rupees!

  6. Imran A Razak says

    so yasir does it mean cng pumps were earning 2.44 million per month before price decrease ?

  7. Yasir Mansoor says

    that was just a simple calculation, i did not include any miscellaneous or maintenance charges yet!

  8. Wasiq Ilyas says

    Agree to that a bit, BUT, where are the calculations for the countless months of huge Profits to the CNG owners ?? yes let me repeat "COUNTLESS "months of HUGE Profits.,you being a CNG station owner is quite familiar with this phrase " YAAR CNG KA STATION KHOLO ANDHA PAYSAY HAY " dont you ?… and yes there is no such business in the world, were you don't face any loss. even in Islam, if a business is not in loss for "once" at least , is considered to be a fishy way of earnings. anyways my point is ,, for few months if an CNG owner is facing losses , n forgetting about the Months they enjoyed the huge profits.. should at least wait for the good days to come back.. Shutting down CNG supply at your stations is quite acceptable to bare further losses, but there is also another factor behind your lil losses. Daily consumption of Natural GAS has doubled the amount from the past couple of years. We are risking our future for Gas scarcity for ever. Its just not your losses in couple of millions,,, its risking our Gas deposits for Billions of people in future. Why to protest ? Why dont you just shut down the CNG ? ohh no Profit ? then why to criticizes govt for losses ? Yes to me its mean enough to Protest, because the main theme of this cause is to make CNG owenrs profitable back again then to be worried about the people who want CNG. and to Risk the Gas deposits in future, Its better to just shut down CNG. In my Opnion just Ban CNG permanently , so that CNG owners will not have to face losses and Yes it is going to be swallowing poison down the throat for us CNG consumers , but its for the Bright future.. Since no one will love to cook Briyani on woods in 2020 , dont you ? 🙂 Lets just stand toagther and protest against Government an BAN CNG Permanently, lets just not be mean to earn profits only , but to worry about our future as well. a bitter truth # Peace

  9. Wasiq Ilyas says

    Agree to that a bit, BUT, where are the calculations for the countless months of huge Profits to the CNG owners? yes let me repeat "COUNTLESS "months of HUGE Profits., you being a CNG station owner is quite familiar with this phrase " YAAR CNG KA STATION KHOLO ANDHA PAYSAY HAY " don't you? and yes there is no such business in the world, were you don't face any loss. even in Islam, if a business is not in loss for "once" at least , is considered to be a fishy way of earnings. anyways my point is ,, for few months if an CNG owner is facing losses , n forgetting about the Months they enjoyed the huge profits.. should at least wait for the good days to come back.. Shutting down CNG supply at your stations is quite acceptable to bare further losses, but there is also another factor behind your lil losses. Daily consumption of Natural GAS has doubled the amount from the past couple of years. We are risking our future for Gas scarcity for ever. Its just not your losses in couple of millions,,, its risking our Gas deposits for Billions of people in future. Why to protest? Why don't you just shut down the CNG? ohh no Profit? then why to criticizes govt for losses? Yes to me its mean enough to Protest, because the main theme of this cause is to make CNG owenrs profitable back again then to be worried about the people who want CNG. and to Risk the Gas deposits in future, Its better to just shut down CNG. In my Opnion just Ban CNG permanently , so that CNG owners will not have to face losses and Yes it is going to be swallowing poison down the throat for us CNG consumers , but its for the Bright future.. Since no one will love to cook Briyani on woods in 2020 , don't you? 🙂 Lets just stand toagther and protest against Government an BAN CNG Permanently, lets just not be mean to earn profits only , but to worry about our future as well. a bitter truth # Peace.

  10. Haider Ali Khan Niazi says

    Goddamn son!

  11. Shahbaz Ali Khan Niazi says

    mama itna dil se agar toune UH mein koi essay likha hota tou aaj professor hota 😛

  12. Wasiq Ilyas says

    lmaoo ,, was just showing my care for CNG consuming frnds ,, lol , karna parta hay boy samjo 🙂

  13. M.l. Ali says

    There is no denying fact that reducing the price of CNG by entirely cutting down on the profit of CNG stations was unfair on part of the Government. But profit margins in the CNG business have to be adjusted reasonably.

    CNG stations are a distribution channel for a National resource whose main purpose was to provide relief to common man and achieve environmental benefits. They are not selling such a product in which they have made value addition through R&D and registered patents for their stroke of brilliance, that they have been earning and now demand such high profit margins. It is just hard to understand how can such a business model be put in place for CNG distribution.

  14. Yasir Mansoor says

    Lemme tell you the Hypocrisy of Petroleum Minister and Zardari !
    They first tried to increase the price of Gas as much as they can! but our murda qoum never stood up, they even bought it at Rs.85 without any regret! We (CNG Association) Went to supreme court to audit and decrease the price of CNG as it is our own product…Then Petroleum Minister Decided to make CNG Station owners sell it at loss, sooner or later stations will windup their businesses & our GOAL of importing LPG will be a huge success! (LPG's Quota is now at Faryal Talpurs hand)

    Imran A Razak At that time Gas Rates Were Completely Different, you calculation is quite irrelevant..

    Wasiq I think you hardly know anything about this Govt, DO you? !! Who ever mentioned (Andhi Kamai), Do you have any idea about the competition of CNG, there's hardly a kilometer with only 1 CNG on it, its even more than a perfect competition! You're completely right that there's no business which faces loss! but this is not loss! we are being forced to sell at loss, without any shortage of Gas! OGRA Agrees to it, The media agrees it! …But

    WHY CNG ASSOCIATION decided to Shut down the Stations in the first place?
    … When we were running at loss, the Govt mentioned if they were facing huge losses why in the world are they still selling it? Then we had to take action over it !!

    (Daily consumption of Natural GAS has doubled the amount from the past couple of years.)
    Wasiq: I think ur only research is media & nothing else! Owh! I forgot, MEdia ke Ghulamon ka dor ha! :)… According to OGRA CNG Stations are using 19% of the total Gas produced! The other is used by Industries & Gas ke Chori ke generators! If we are producing or selling CNG, we are paying Rs. 7/KG for Gas Development Surcharge! Us ka sawal tou koi nahi karta ke woh paysa kahan ja raha ha!

    ENGRO has already initiated to invest on THAR Coal, which will start to produce Gas & deisel in 2015, I don't need to tell you what potential Thar Coal Mine holds! so again you're Claim of gas being completely depreciated again becomes irrelevant..

    Wasiq, you're quite selfish! DO you have any idea 1 Million Car + The whole Public Transport is dependant on CNG, We only asked supreme court to atleast let us sell at which we can easily maintain the operating cost + Rent…!!! & Again About the blind Profits! 60-70% CNG station are on lease! us ka kya profit, Do you have any idea how does this investment costs??

    Khair let's cut the crap!

    I'm a petrol pump owner, i don't care if CNG is completely shutdown in the country or not, eitherway petrol will remain! On a very 2nd note, LPG ati ha tou kis ke paas ayegi?

    It is you ( the people, who are running on cng), who cannot bear to afford petrol even after buying a car worth Rs. 1.6 Million Corolla, you will have to change your cylinder again to LPG! Chk this news!!!

    ISLAMABAD: The government is considering to impose a new tax on compressed natural gas to reduce the price difference between CNG and petrol in order to phase out the use of the gas in private transport..

    That means 20-30 Rupees will be increased and none of the person who stood against CNG Association, will say a single word over this!

  15. Yasir Mansoor says

    Govt is trying its best to completely shut down CNG, so they can introduce LPG 🙂

  16. Baber Kaleem Khan says

    I had an idea. Why haven't you station owners gone against OGRA and ask them instead to reduce their selling price and increase your margin?

    Also, we have had one side of the story here. You interested to write an article at PW blog telling us your side of story? Also why you are not asking for increase in your margins by ogra decreasing their selling price?!

  17. Baber Kaleem Khan says

    Yasir Mansoor Also, can your station be converted into LPG? Do put this all in a article if you're interested, this is my email: [email protected]

  18. Kasim Javed says

    Pakistan needs the Khilafah System which will get rid of monopolies and ensure that basic necessities for people like Petrol/Gas are not privatised.

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