After the protests and strikes by CNG stations earlier this month, the government has decided in principle to defer the planned increase in tax on CNG by a year.
Sources in the Ministry of Petroleum and Natural Resources said on Friday that the decision to defer the planned increase came after a meeting on Thursday. Officials of the Petroleum Ministry, including Energy Minister Asim Hussain, Petroleum Secretary Ejaz Chaudhry, and representatives from the All Pakistan CNG Association (APCNGA) attended the meeting.
The government had earlier proposed to bring the Gas Infrastructure Development Cess rate to Rs 300 ($3.20)/MMBtu from Rs 156/MMBtu from the fiscal year starting on July 1, 2012.
“We opposed this raise and observed a three-day countrywide strike, as the increase in tax would raise the CNG price by almost Rs 15 and bring it to Rs 94 per kilogram,” APCNGA President Ghias Paracha said n Friday. The government has also decided that the CNG price will be pegged at 60 percent of the gasoline price for one year starting from June 16, as compared with the previous 55 percent.
There are around 3,500 CNG stations across the country, with CNG consumption at about 400,000 Mcf/day. About 40 million people in the country use CNG.
Pakistan will experience its worst gas crisis in 2016 when the shortfall is expected to hit 3.021 Bcf/d with no big discoveries in sight, the State Bank of Pakistan said last week. It added that the country will become increasingly dependent on imports to meet its energy demand, adding that rationing of natural gas supplies was inevitable in the near future.
Pakistan is currently facing a gas shortfall of about 1-1.2 Bcf/day, with consumption at about 5.2-5.4 Bcf/day and production at 4.2 Bcf/day.
