50pc cut in fares is also possible only if government allocates at least 50 MMCFD gas to sector till start of LNG import by private sector

ISLAMABAD   -   The CNG industry can save $2.1 billion per annum while 50 per cent cut in public transport fares is also possible only if the government allocates at least 50 Million Cubic Feet per Day (MMCFD) gas to the sector till the commencement of liquefied natural gas (LNG) import by the private sector.

“We can provide 53 percent cheaper gas on CNG stations for public transport compared to petrol price that will save around $2.1 billion import bill annually, Ghiyas Abdullah Paracha, Group Leader All Pakistan CNG Association (APCNGA) said while unveiling CNG sector plan in a media briefing here.

Paracha said that at present, government companies have monopoly over the LNG import and distribution despite the fact there are all regulatory requirements in place. The consumers had paid Rs 16b during the last five years on account of capacity payments during last five years to Gas Port LNG terminal which has been running on average 70pc capacity. Gas Port has LNG terminal with 750 mmcfd gas whereas government has 600 mmcfd LNG allocation whereas it has 150 mmcfd capacity in hand but government companies had made it impossible to utilize this capacity. He said there would be 53pc cheaper LNG at CNG stations even if government withdraws all subsidies on petrol. He said that it would help reduce the circular debt that had crossed Rs 2000b in energy sector. The government should allocate at least 100 MMCFD gas to the CNG sector till the commencement, said Ghiyas Abdullah Paracha. “Revival/expansion of the CNG sector can generate thousands of new employment/job opportunities while the use of CNG as an alternative fuel for motor vehicles is equivalent to having an environmental benefit of 152.63 million trees per annum,” he added. Ghiyas Abdullah Paracha also said that CNG is still cheaper than prevailing petrol price while its price will be cheaper than petrol price if the private sector is allowed to import LNG for the CNG sector of the country. Paracha said that at present the CNG is 10.4 pc cheaper than the prevailing price of gasoline in the country while the government is giving subsidies in petrol price and have fixed the petroleum levy (PL) and General Sales Tax (GST) at zero level. He also said if the government allows the private sector to import LNG for the CNG sector then approximately $2.135 billion (PKR 419.87 billion) can be saved with import of 300 Million Cubic Feet per Day (MMCFD) LNG to the country and CNG can be cheaper by 18.631% than the current gasoline price. “General public can find significant 50 percent relief in fares with the use of CNG as a fuel in the public transport,” said Ghiyas Paracha. The APCNGA group leader said that the private sector can be helpful in meeting this target by approximately 10pc only if it is allowed to bring LNG for the CNG sector and utilize the unused LNG terminal capacity. He also demanded from the government to grant permission to use the surplus (private) terminal capacity of LNG terminal and authorization for utilising the unused contracted terminal regasification capacity of the LNG terminal. Similarly, all provincial chief secretaries/transport secretaries should be directed to encourage the owners/transporters to convert their public service vehicles to the environment friendly and cheaper CNG fuel and revise the gas allocation priority list in consultation with the stakeholders. Furthermore, support the CNG sector by giving the level playing field for business. Total gas consumption required by the entire CNG sector is 400 Million Cubic Feet per Day, said Ghiyas Abdullah Paracha.