OGRA finalises CNG pricing formula

The Oil and Gas Regulatory Authority (OGRA) on Thursday finalised a “consensual” CNG pricing formula and sent it to the Ministry of Petroleum and Natural Resources for approval.
However, contrary to OGRA’s claims, the All Pakistan CNG Association (APCNGA) has rejected OGRA’s proposal, saying the new formula would not be accepted unless the government reduces taxes on CNG.
Official sources confirmed that OGRA was now awaiting the federal government’s nod on the proposal, which would then go to the judiciary to get finalised and implemented in letter and spirit. Under the formula, CNG will be sold at Rs 72.20 per kilogramme in Region 1, which comprises of Khyber Pakhtunkhwa, Balochistan and Potohar. In Region 2, which includes Sindh and the Punjab, CNG would be sold at Rs 63.76. The suggested prices are Rs 2.5 less than the previous proposal presented by OGRA. While the gas price has been reduced slightly in the new proposal, Rs 7 per kilogramme would be paid to CNG stations under the head of “operating costs”. Other details of the agreement are yet to come.
On the other hand, APCNGA Chairman Ghayas Paracha accused OGRA of acting against the Supreme Court’s orders by sending the proposal directly to the Ministry of Petroleum and Natural Resources. He further accused the regulatory body of destroying the CNG sector. Paracha said that OGRA had further decreased the CNG price by Rs 2.5 without consulting them on the new pricing mechanism. It is worth mentioning here that the current price of CNG in Region-1 is Rs 61.64, and Rs 54.16 in Region-2.
In its order of October 25, the Supreme Court had ordered the government to cut CNG prices, while declaring the connection of CNG prices with the price of petrol “illegal”.
The court will hear a case in this connection on December 5. In the previous hearing, Chief Justice Iftikhar Muhammad Chaudhry remarked that OGRA could announce the new prices after consulting the relevant stakeholders. Meanwhile, motorists and commuters using public transport faced difficulties as most of the gas stations across the country remained closed for the fourth consecutive day in protest against what they called “highly unreasonable” pricing formula. The gas stations remained shut even though the CNG associations had not officially given a strike call. CNG stations in Karachi, Hyderabad, Jamshoro, Sukkur, Nawabshah, Larkana, Mirpur Khas, Lahore, Faisalabad, Sargodha, Multan, Rawalpindi, Islamabad, Peshawar, Haripur, Abbottabad, Mansehra, Quetta and other cities of the four provinces remained shut due to which people had to face severe difficulties.
Private transporters held protest demonstrations in various cities against the unofficial strike by the CNG station owners. Massive queues of vehicles were seen at a few company-operated CNG stations that remained open. The commuters, mostly on way to work, faced extreme difficulties in reaching their destinations. The senior office-bearers of the APCNGA refused to give a specific date as to when the strike would be ended.