Over 500 MMCFD of natural gas is used as fuel in vehicles. The use of CNG as an auto-fuel is highly unwise considering the fact that scores of power-generation and fertiliser plants and textile units have either been closed down or are working below their maximum production capacity due to irregular supply of natural gas. It is also sheer insanity to provide subsidies on CNG to keep its price at 55 percent of the price of gasoline. Considering the end-use, both gasoline and CNG should have same prices. Fossil fuels around the world are sold on the basis of their respective thermal value and ultimate end-use. Subsidies are counterproductive and a burden on the economy. Prudence demands that the use of CNG as cheap auto-fuel should be stopped and conversion of natural gas into CNG for this purpose discontinued in a planned manner. The government should also stop importing CNG kits. The other alternative for CNG can be liquefied petroleum gas. Individuals who have invested in CNG retail outlets should be encouraged to convert their outlets into gasoline or LPG stations. The government should provide necessary assistance to the owners of CNG stations in this regard with the cooperation of oil marketing and distribution companies.

Pakistan is not likely to be self-sufficient in fossil fuels any time soon, considering the slowdown in petroleum exploration and production activities in the country. We haven’t seen any new international major player entering this industry. Therefore, it will be imprudent to continue to waste natural gas on auto-fuel, instead of feeding it to the industry.

M S Hasan