New CNG pricing formula proposed?

Lahore: The All Pakistan CNG Association (APCNGA) on Wednesday proposed a new pricing formula to keep the CNG business viable and keep the masses from the impact of high price of the product.

Three options have been given to OGRA which have been designed in view of the directives of Supreme Court, said Ghiyas Abdullah Paracha, Chairman Supreme Council APCNGA.

Talking to media men, he said that OGRA should accept any of the option to fix the prices immediately. We are opposed to any upward revision in the prices of CNG but a just profit is our right, he added.

Majority of the business are run on the basis of 30 per cent profit while those with transaction to the tune of billions can operate of reduced rates, he said.

Ghiyas Abdullah Paracha said that we will make our formula part of the OGRA’s public hearing scheduled on Nov 23 at Lahore.

He said that OGRA is free to impose prices recommended by auditors provided our four major concerns are addressed.

Giving details, he said that CNG sector should be provided gas on the rates sold to other sectors. Auditors have shown average sale of the CNG filling stations as 74 thousand kg which is in fact not more than 51600 kg, he said adding that profit margin should be rationalised and repressive taxation should be abolished forthwith.

He said that the options forwarded by the APCNGA are not new but already being practiced in other sectors.

He said that fertiliser sector is getting gas for Rs 116.27 per mmbtu and paying Rs 100 as Gas Infrastructure development Cess (GIDC) which if introduced in CNG sector will bring prices down to Rs 48.15 in region 1 and Rs 46.80 in region 2.

Giving details of second option he said that industrial sector is paying Rs 460 per mmbtu and Rs 50 as GIDC which if imposed for CNG sector will bring prices to 69.79 in region 1 and Rs 66.63 in region 2.

Paracha said that private power producers are getting gas for Rs 460 per mmbtu and paying Rs 100 as GIDC. Uniform gas rates and taxation will result in CNG price in region one at Rs 43.47 and Rs 70.00 in region 2.

Paracha said that since there is nothing new in this formula and similar rates of gas and same taxation is already bring practiced in other sectors therefore there is no reason for any objection.

Accepting the APCNGA formula will streamline CNG prices, bring uniformity among all sectors of the economy and provide much needed relief to masses.