CNG kit ban = taking a $6m bath


The government is losing a plausible revenue share from CNG kit manufacturing companies that are exporting around 60,000 kits to Afghanistan, Italy, Thailand, China, Brazil, Iran, and Bangladesh. By din of imposing ban on CNG kits, the government is losing $6 million foreign exchange a year what it gets from the exports of CNG kits to the said countries.
Last year, one of the major players alone has exported 51,000 CNG kits worth Rs. 135.6 million and contributed around 70 million rupees in terms of taxes and duties on parts import and the kits’ export.
It may be noted that roughly 50 per cent of the components of CNG kits are being manufactured locally, therefore, the government’s decision of banning CNG is having adverse impacts, in terms of financial losses and employment, on both the companies and their associated vendor industry, which comprises of leading car manufacturers and Tri-Wheeler manufacturers.
Moreover, this decision is making way to erode all heavy investment made by such companies and contribution to the national exchequer. The international community including Italy and Argentina, which is already surprised by many ironic decisions of the Pakistani government, has once again showed its amazement on this decision of the government.
Lately, Japanese Ambassador Hiro Shi Oe reportedly conveyed his concerns to the Commerce Minister over banning CNG kits in the country, which is to become a fatal blow to the Japanese investment in Pakistan.
Talking about trade opportunities between Japan and Pakistan in the auto sector, the ambassador was astonished that Pakistani government has placed a ban on fitting CNG kits in new cars. It is to be noted that Original Equipment Manufacturers (OEMs) sold over 0.6m CNG fitted vehicles in the last ten years. Industry experts believe that the recommendation of the Ministry of Petroleum to shutting down CNG conversions at much more safety abiding car manufacturing companies is another blow to the industry because their standards are very good and could be checked at any stage.
“Severe gas shortage in the country could be managed easily as it depends on government policies and their practical measures to combat the issue. The government has to come up with concrete solutions for energy crisis because CNG, being the best eco-friendly fuel, suits most to a developing country like Pakistan,” they added.
“‘The energy shortage is there but a lot of opportunities are available for its solution,” the experts said adding that the government’s facilitation could bring in new energy investments in Pakistan to generate further employment.
Pakistan is a big market of CNG with a huge network and infrastructure of over 3500 CNG filling station which serve around 3 million vehicles including 630,000 cars with factory-fitted CNG cylinders.
The experts said that the government should lift the ban as it would be a great damage to this industry and will also create huge unemployment.