Government takes another jab at CNG sector

ISLAMABAD - After failing to restrict the use of compressed natural gas (CNG) in public transport vehicles, the government has made another subtle attempt to throttle the sector by blocking gas supply to 551 CNG stations in Punjab for three months until May 31.
All Pakistan CNG Association (APCNGA) Chairman Ghias Paracha condemned the government’s move and called it unjustified and illogical.
He said the Sui Northern Gas Pipelines Limited (SNGPL) had notified that all CNG stations set up after 2008 were eligible for only 9 months gas supply and their supply was being immediately suspended for the next three months.
He said the government had made an agreement with the association that the gas load shedding would be reduced from February. However, the SNGPL had notified an increase in the duration from two-and-half days to three days, which was illogical, as domestic pressure on gas reduced with the start of the spring season. He said the Oil and Gas Regulatory Authority (OGRA) had cancelled 151 licenses of the CNG stations last week. Paracha said they had convened an emergency meeting of the association on March 5 to decide a future plan of action. He said they had also sent a letter to the Petroleum Ministry to for a meeting to listen to their point of view on the new move by the SNGPL. He said the association would take strong measures if the government did not dissuade from its subtle attempts to throttle the CNG sector.
The government estimates that during the last decade, gas production has increased by only seven percent, while its consumption increased by 40 percent per annum. CNG sector is identified as the major user of gas whose consumption has increased by 39 percent per annum during the last decade.
More than 3.5 million vehicles ply on CNG, which according to official estimates consume 390 mmcfd. The government wants to reverse its CNG policy but alliance of transporters and CNG investors is seen as a major pressure group that could put on halt any such plans. The government has now opted for a plan B in order to bring CNG prices at par with POL prices The government has already imposed a ban on the import of CNG kits and cylinders on December 15, 2011, which raised serious concerns in the automobile sector, saying the move would jeopardise investment.