Oil and Gas Regulatory Authority (OGRA) on Wednesday notified reducing CNG prices in Khyber Pakhtunkhwa, Balochistan and Potohar region by Rs0.72 to Rs73.58 per kg and in Punjab and Sindh by Rs0.38 to Rs69.24 per kg. Notification for reduction in prices was issued after government acceded to CNG and transport associations demand reduced gas infrastructure cess from 60 to 50 per cent. Imposition of the rest of cess will be decided after consulting the associations.
14pc increase rejected
OGRA had notified a massive hike of 14 per cent in the gas tariff along with imposition of gas cess on CNG sector against which the association gave a strike which was observed countrywide, forcing reduction in cess while forming a committee to review gas prices. OGRA notification said increase in gas sale prices was necessitated owing to cess imposed by federal government, rise in cost of gas decease in gas sales volume as well as prior year adjustments of gas companies in respect of line losses and non-operating income. About adjustment in CNG consumer price, it said it was necessitated owing to hike in natural gas prices and imposition of gas cess by federal government.
12 per cent UFG losses
The abnormally high annual unaccounted for gas (UFG) losses of 12 per cent of the two state owned gas utility companies as compared to international bench mark of five per cent was the main reason for the hike in tariff. One per cent UFG converts to a loss of Rs2 billion per annum. This translates into a massive loss of Rs24 billion per annum. According to notification tariff for CNG in Zone I consisting of KPK, Balochistan and Potohar region at the rate of 1070 BTU revised to Rs73.58 from Rs74.34 kg. While in Zone II consisting of Sindh and Punjab at the rate of 950 mmBTU, the tariff revised to Rs69.24 to Rs69.62 per kg.
Petroleum ministry has been stressing reducing gap between CNG and petrol prices to reduce the demand for gas to provide it to industries, which under agreement are eligible for only nine month supplies.