The Supreme Court of Pakistan, in its interim order on Thursday, declared the mechanism of basing CNG prices on the price of petrol illegal, ordering Ogra to revise prices by Nov 1.
During Thursday’s hearing of the case on petroleum products pricing, the SC also ruled that the profit rate and operating costs on Compressed Natural Gas (CNG) was illegal.
According to a private television channel, a two-member bench of the apex court headed by Chief Justice Iftikhar was hearing the case.
The court declared that the profit of Rs 10 per kilogram on the price CNG and the linkage of CNG price with that of petrol were illegal.
During the proceedings, Petroleum and Natural Resources Secretary Waqar Masood told the court that the weekly pricing mechanism for petroleum products had been suspended until the Economic Coordination Committee (ECC) of the cabinet gives its decision.
In his remarks, Chief Justice Iftikhar said that Compressed Natural Gas (CNG) stations earned a per kilo profit of Rs 11.91, adding that the price of CNG should not be linked with that of petrol and that the 50 per cent profit margin on CNG was strangulating the consumers.
Moreover, Oil and Gas Regulatory Authority (Ogra) Chairman Saeed Ahmed Khan submitted a report on the details of petrol and CNG pricing.
After reviewing the report, Chief Justice Iftikhar remarked that overcharging for CNG was tantamount to exploitation of consumers.
According to the Ogra report, the government’s procurement cost of CNG in Region 1 was Rs 19 per kilogram whereas the per kilogram price of CNG in Region 2 was Rs 17.57 and that the government decided on the price after including development surcharges.
The chief justice moreover inquired as to why the government was charging an exorbitant amount on the pretext of operating costs and said that exploitation of consumers would not be allowed.