RE - The government has increased Rs 4.40 per kg price of the Compressed Natural Gas (CNG) while the CNG owners have threatened the authorities that they would go on shutdown strike if they are not allowed to pass on the raise to the consumers already hit hard by the high inflation.
The new CNG price would swell to Rs 48.90 per kg across the country against the existing price of Rs 44.50 per kg if the CNG station owners would be allowed to pass on the increase to the consumers, it was reliably learnt on Sunday.
Sources in the Oil and Gas Regulatory Authority (Ogra) disclosed that the government has strictly directed the CNG owners not to pass on this increase to the consumers. "Therefore, they are all set to go on strike as the government will not take back the decision," a high-ranking official said seeking anonymity.
He further claimed that the CNG owners are blackmailing the government with threats of countrywide strike and protests. The government is not in a position to afford confrontation with such an important sector under present political scenario as millions of vehicles have been converted to CNG, an environment friendly fuel encouraged during the previous regime.
On the other hand, the owners of CNG stations are expecting public support as they can paralyse the routine life in the country by pushing one button, in case they go on strike.
The All Pakistan CNG Association has threatened the government that they would observe countrywide strike if the authorities tried to cut down their profit margin. The CNG owners are earning approximately Rs 18 to Rs 22 per kg profit on this product even after including the operational charges.
The representatives of the CNG association are meeting in Karachi today (Monday) to decide their further plan of action as they earlier had given January 5 deadline to the government, warning the authorities to take back the price increase decision or face countrywide protests and shutdown. Well-placed sources revealed that ultimately the government would allow the owners of the CNG stations to pass on the increase to the consumers to avoid confrontation.
Sources said that the government has been left with no other option but to increase the gas tariff, as it was one of the IMF conditionalities, no matter it will give bad name to the ruling party. The Fund, before extending loan facility, had asked Pakistan that the country would have to take difficult and unpopular decisions to overcome balance of payments crisis.
A representative of All Pakistan CNG Association, when contacted, said that bringing prices of petrol and CNG on equal level would destroy the CNG business as they have made investment of around Rs 182 billion in this sector.
He further said that CNG stations all over the country were consuming only 5.6 per cent of the total gas supply and the government's claim that CNG stations using 20 to 60pc of the total supply was totally false and baseless.
"After the present increase, the gas prices would swell to Rs 50 per kg and this escalating trend will bring its price closer to that of petrol, which is dangerous for the CNG sector," Shuja Anwar, a representative of the association said.
However, he claimed that they would not pass on the burden to the costumers rather they would prefer to close down their businesses.
It is important to mention here that last year, the CNG station owners had observed complete strike in various parts of the country including Islamabad against the imposition of tax on the CNG stations. Later, they were allowed to pass on the tax on the consumers.