ZAHEER ABBASI
ISLAMABAD: The Federal Board of Revenue (FBR) has reportedly supported the proposal to lift ban on import of the CNG cylinders and kits subject to withdrawal of concessionary zero duty and imposition of 10 percent duty on import at ad-valorem.
Sources told Business Recorder here on Monday that the FBR has submitted comments on the exemption of duties and taxes on the import of LPG cylinders, kits and autogas station equipment and lifting of ban on the import of CNG kits on a proposal of Ministry of Commerce.
The Commerce Ministry argued that ban on CNG cylinder and kits has created problems at many levels. The local and foreign investors in CNG Kits manufacturing risk losing their investments. Moreover, ban has encouraged the smuggling of low quality kits and spares parts to meet the after-sale requirement of the market and underlined the need to check the usage of CNG through imposition of tariff and taxation measures rather than a ban.
However, Ministry of Petroleum and Natural Resources has opposed the proposal for lifting ban on CNG cylinders, maintaining that the country is facing a severe energy crisis because of huge gap between demand and supply. The Petroleum Ministry stated that there is a dire need for diversification of automotive sector fuel consumption by introducing LPG as an alternative to petrol and CNG to save around 13 percent natural gas.
The high ups of Petroleum Ministry maintained that production of Natural gas from indigenous sources of around 4 billion cubic feet (bcf) is considerably less than the demand exceeding 6 bcf and 13 percent of natural gas produced in Pakistan is being consumed by CNG sector. The ministry proposed diversification of automotive sector fuel consumption by introducing LPG as an alternative to petrol and CNG.
An official said that Ministry of Petroleum has recently informed the Economic Coordination Committee (ECC) of the Cabinet that it is working on import of natural gas in the form of LNG and transnational pipeline project; however, these projects are at an early stage and may require four to five years to materialise. The meeting was informed that in the short term, LPG being a domestic resource and partly imported could be easily used as an alternate to natural gas with a view to decreasing heavy reliance on the latter. The LPG is already being used as a fuel for domestic consumers and has a complete infrastructure and a marketing chain in the country.
The infrastructure for additional and enhanced import of LPG is available in the country as two LPG terminals are operational in the country with the capacity of 600,000 MT/annum and are currently operating at only 10 percent of their design capacity, the ministry reportedly added. Sources said that the ECC has not considered lifting of ban on CNG cylinder and conversion kits.
source: business recorder