RECORDER REPORT
KARACHI (June 29 2006): The station owners and dealers of compressed natural gas (CNG) have hinted at an increase in the prices of CNG, as it is hard for them to continue passing on any benefit to the consumers due to high input costs. Previously, the CNG station owners association had passed on the benefit from their earning margins.
Last year's increase in natural gas prices of 17.5 percent by the Oil and Gas Regulatory Authority (OGRA) had not affected the CNG consumers and the association had only passed on 7.5 percent to its users.
This was disclosed by the Chairman and President of CNG Station Owners Association of Pakistan and President of CNG Dealers Association, Abdul Sami Khan in a joint press briefing here on Wednesday.
Malik said, the OGRA has not yet notified the gas determination and the association is waiting for the document to workout the new CNG price. Rising fuel cost and other overheads has forced the CNG stations not to pass on any benefit to consumers. "We have urged the OGRA to look into the matter seriously, as increase in the CNG price would hit the industry and its consumers hard."
"It would affect the CNG consumers in view of the gas - petrol price differential and make it unattractive for its users if the gas tariff keeps on rising", he added.
One of the reasons behind the government's to encourage the CNG sector was the availability of huge reserves of natural gas in the country and to help reduce oil the import bill to the national exchequer, he added.
Malik said, by expanding the CNG sector has helped to save of $1.8 billion annually and in next five years it will further reduce the oil import bill. On the occasion, Abdul Sami Khan also said, the government decision for implementing the new policy to set up a CNG station by reducing the number of no objection certificate (NOCs) from a high of 15 to only three would help us greatly.
In the past, he said, the station owners had to strive for one-and-a-half to two years to set up a CNG station, now it would take only one month. If at all, the bureaucratic hurdles in Karachi would not hamper this initiative. Sami Khan said, "We want to help the government's policy to encourage the use of cleaner fuel in the country".
Previously, a CNG station owner had to obtain NOCs from the local police station, traffic police department, forest department, environment department, phone, gas, electricity utilities, water and sewerage department, town planning department etc, he said. He added that obtaining a NOCs from these departments took over a year and created several problems for the investors.
He said, the new policy for obtaining the NOCs would help to establish a CNG station in a month's time, if the electricity and gas utility too adopt the same.
He said the CNG station has been victimised by the gas utility in the city. The gas utility is charging an extra amount of Rs 1.5 to 2 million from a CNG station for increasing the eight pounds per square inch (psi) to 15psi of gas pressure which is unjustified. He added, the gas utility in Punjab province does not charge such an amount for enhancing the pressure. Secondly, the billing problem of city's CNG stations, which should be monitored on a quarterly basis. Presently gas utility charges different prices various stations. Some stations do roaring business due to the location where its situated, he added.
Copyright Business Recorder, 2006