Huge bottlenecks of cars snaking away from filling stations have become a familiar sight in Pakistan as a row festers between retailers and the authorities over the price of compressed natural gas.
CNG is substantially cheaper than petrol in Pakistan and is widely used by private motorists as well as in taxis, rickshaws and buses.
But many CNG stations have closed their doors, declaring they are no longer making money following a Supreme Court hearing at the end of October that led to pump prices tumbling by a third. As prices climbed to around Rs 92 per kilo, Pakistan’s highest court questioned the linking of CNG to international oil prices and how much retailers were charging at the pumps.
The court queried whether there was a need for the price of CNG — produced locally — to be pegged to petrol prices, which reflect constantly fluctuating worldwide oil markets. As a result the government’s Oil and Gas Regulatory Authority (OGRA) cut the pump price to around Rs 61 per kilo — good news for motorists but disastrous for the CNG station owners. They say they are no longer making a profit and for the past two weeks many filling stations across Punjab, the most populous province, have only opened for three days a week.
It is a row that observers say exemplifies Pakistan’s lack of long-term planning, particularly on energy issues — but also the willingness of special interest groups such as CNG retailers to exploit public misery for their own gain.
“It’s typical of the way Pakistani administration works — they never have a long-term view. They have an immediate issue to deal with and they don’t see the problem in the longer perspective,” political analyst Hasan Askari.
Pakistan has substantial natural gas reserves and in the past the government encouraged motorists to convert their cars to run on CNG in order to reduce dependency on imported oil.
But security worries in gas-rich areas and years of under-investment in exploration mean demand has far outstripped supply and the country now suffers gas shortages every winter.
Factories and homes suffer “load-shedding” — having their supply cut off — infuriating ordinary people who cannot cook or heat their homes and damaging the economy by halting industrial operations. Askari said that the CNG station owners were seeking to stir up public anger with their strike to force the government’s hand.
But the president of the CNG station owners’ association, Ghayas Paracha, said his sector was being treated unfairly and demanded the government level the price playing field.
“One solution is… every sector giving the same price for the gas,” he said.
“There is a big discrimination for us. We pay for instance Rs 300 per MMBtu (one million British thermal units — a standard unit of energy used to calculate gas prices) of taxes, but the industry sector is paying only Rs 50 per MMBtu.”
Paracha said around 3.7 million cars in Pakistan run on CNG and the filling station shutdown has meant huge queues at the few that remain open.
Farooq Qadri, a taxi driver in Rawalpindi, said that the CNG “strike” had forced him to leave his car at home for most of last week, severely denting his income.
“I lost 80 percent of my business — it’s as if I hadn’t worked at all. How am I meant to feed my family?” said the father-of-two. Anger at the CNG strike is not confined to vehicle owners. Public transport passengers too have complained that drivers of taxis, buses and rickshaws have taken advantage of the crisis to hike up fares.
The CNG station owners are to hold further talks with OGRA later this week after rejecting an offer to increase prices by Rs 10 per kilo.
Another hearing before the Supreme Court is also scheduled for Wednesday.Earlier this year the government banned people from converting their vehicles to run on CNG and halted the sale of new CNG-powered cars. Now the anger of many motorists is reserved for the politicians.
“We spent money converting our cars to run on CNG, but now they tell us there’s no more CNG. We’ve wasted our money,” said Qadri the taxi driver.
Mohammed Yousuf, a 60-year-old father-of-four, said that the crisis had led to a nightmare day when he was forced to leave his family by the side of the road for hours after he ran out of fuel.
“The authorities must decide: either they convert all the cars back to run on petrol or give us CNG,” Yousuf said.
Motorists suffer amid gas price row
