Govt to restrict CNG consumption

While the country is facing a crippling power and gas shortfall that is likely to worsen further in the coming months of winter, the government is considering to restrict the consumption of compressed natural gas (CNG) in privately used CNG fitted vehicles for six month to one year, Minister for Petroleum and Natural Resources Dr Asim Hussain said in a meeting of National Assembly Standing Committee on Finance on Friday. The Ministry of Petroleum and Natural Resources has sent a summary to the Economic Coordination Committee (ECC) for approval to discourage consumption of CNG in private cars except CNG buses and transport vehicles used by passengers, the minister said.

Ban on CNG kits
Hussain said that the ministry would ask the cabinet to bar car companies from fitting CNG kits in private vehicles at their manufacturing facilities. The ban would be implemented on CNG fitted imported cars, CNG kits and cylinders. The government aimed to impose a ban on CNG usage in all kinds of cars as vehicle owners could afford petrol and diesel, though they were expensive, he said. Minister said that Government intends to reduce the difference between prices of CNG and other fuels as there is a huge price difference between petrol and diesel that spurred people to switch to CNG. He said people need to realise that the country is facing a severe gas shortage and gas shortfall would further exacerbate in the coming days if people did not follow the gas load management plan. He said that in this year under the load management plan gas load shedding will be observed in Sindh and Punjab while only 90 mmcfd gas will be provided to Quetta. However, the CNG filling station operators may react strongly to this move. CNG has a share of around 8 per cent in total gas consumption. Public transport vehicles started converting to CNG a few years ago and today a large number of small and big buses are running on this cheaper fuel.

Petroleum Levy and Gas Infrastructure bill
National Assembly Standing Committee on Finance also approved gas infrastructure development cess and petroleum levy bills with govt aiming for Rs35 billion under the gas cess; $1b for dedicated Karachi-Lahore LNG pipeline. These levies would not be chargeable on domestic sector consumers and general public, limiting its scope to the companies. The Senate Standing Committee on Finance already approved these two bills for the imposition of gas infrastructure development cess and petroleum levy on compressed natural gas (CNG) and liquefied natural gas (LPG).

Gas Cess, misused instrument
NA Finance committee met under the chairmanship of Chairperson Fauzia Wahab. The committee members were of the view that historically cess has been a misused instrument, never serving the purpose it was employed for. The PPP MNA Qamar Zaman Qaira gave the example of Iqra surcharge, terming that the money collected from it have never been used for the betterment of education system in the country. Finance Secretary Waqar Masood assured the committee members that the funds collected from gas infrastructure cess will only be utilised on development of gas infrastructure in the country. He said that only 25 per cent people in this country are benefiting from gas while other 75 per cent people are using expensive fuel for daily use. He said government is trying to minimise the difference between different fuels and to make them realistic. He said that government is only charging 30 per cent price of gas from consumers and assured the members that gas price will be determined at 55 per cent of the petrol price.

Rs35b to be raised
Petroleum Minister Dr Asim Hussain said the gas cess will create space for the federal government for infrastructure development, as it will generate Rs35 billion per annum. He assured that cess and petroleum levy would only be imposed on companies that are included in the industrial and fertiliser sectors. Petroleum minister said the government’s hands were tied, as $1 billion were required for deploying a dedicated pipeline to transmit LNG from Karachi port to Lahore. Under the law, Sui gas companies get 17 per cent return on developing infrastructure, while a markup of 17 per cent will be payable on the loan procured, which will also impact the people, but cess will help counter this burden. Dr Asim said a few chosen people have held up opening of the LPG sector for competition. Dr Asim said influential people are hampering import of LPG, as they have a monopoly over the LPG marketing business. He said import of LPG was necessary to counter the energy crisis. The committee approved the bill. He said that price of Pakistan-Iran gas would be available round $13 to 14 per mmBTU while gas from Turkmenistan-Afghanistan-Pakistan-India (TAPI) would be available at $12 to 13 per mmBTU. He said that his ministry has given the proposal to Finance Division for the Fertiliser Equalisation Surcharge in order to maintain the urea price equal in the whole country.