Stung by the unexpected rise in the US dollar against the Pakistan Rupee and the rise in petrol prices in the international markets, the government is considering imposing levy on Compressed Natural Gas (CNG) with immediate effect to halt the rush toward the less priced natural gas from other expensive fuels.
A source at the Ministry of Petroleum said the sudden change of dollar-rupee parity raised an alarm as the Oil and Gas Regulatory Authority (OGRA) had calculated an increase of Rs 3.60 per litre in the price of petrol. With the dollar going up in the open market by Rs 4, the calculated increase in petrol price was over Rs 7.60 per litre.
Increase in petroleum prices will force the motorists and other consumers towards natural gas that would further increase its shortage during the winter season. The only way out is the immediate imposition of levy on CNG to reduce its consumption without having to increase the gas holidays, he added.
The levy on CNG was allowed under the finance bill of fiscal year 2008-09 even though it was not imposed then but now there is no option other than to immediately impose it, the source said, adding that even though the instructions were to maintain the parity of 55 percent difference in petrol and CNG prices. He said at present the parity was at 51 percent, which was being recalculated under the emerging scenario. The source said the government was in no position to pass on the huge impact in POL prices to the consumers and the emerging scenario was shared with the finance team in Washington who ordered the State Bank of Pakistan to immediately take rectifying measures.
If the increase in dollar price in the open market was not contained before the notification of POL prices for the next month, the entire process for revamping the energy sector could go wasted, the source said, adding that the Finance Ministry had assured that the situation would be controlled in the next few days.
