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Sindh CNG consumers to pay Rs6 more per litre from tomorrow

By Khalid Mustafa
August 05, 2016

ISLAMABAD: The Sindh CNG Association has decided to increase by Rs6 per litre from tomorrow (August 6) the CNG price in the province, including Karachi, under the changed pricing formula but without the ECC’s and Ogra’s approval.

However, the officials of Oil and Gas Regulatory Authority say if the CNG price in Sindh is increased, it will be a negation of the law as the increase in CNG in Sindh requires the approval of the ECC (Economic Coordination Committee) and Ogra’s nod as well.

According to officials at the Ministry of Petroleum and Natural Resources, the Sindh CNG Association has decided to increase the CNG price on its own by Rs6 per litre. Under the new formula, the CNG is to be sold in litre instead of kilogramme from tomorrow (August 6, 2016). And the price of CNG at Rs67.50 per kg will now be sold at the price of Rs48.20 per litre from August 6.

However, as per new formula, the price of CNG should have been at Rs42.20 instead of Rs48.20 per litre meaning that the price of the product has increased by Rs6 per litre. The official sources say that the consumers will have to pay Rs6 additional per litre because of the decision taken by the Sindh CNG Aassociation. However, Ogra says that with the change in price of the product through shifting from kilogramme to litre, the CNG outlets’ owners will earn unjustified Rs6 per litre. The Regulator also says that the CNG price mechanism is being changed without getting its approval from the competent forums.

Mr Sami Khan, the CNG Association Chairman met, the other day, with Federal Minister for Petroleum and Natural Resources Mr Shahid Khaqan Abbasi and took the minister into confidence prior to the decision under which the CNG price will be increased from August 6, 2016 by implementing the changed pricing mechanism. The  CNG Association chairmen wanted the minister to give the changed pricing formula of CNG a legal cover. The Association also wanted the minister to send a summary to the ECC seeking the approval of the new pricing formula.

“However, prior to getting the nod of ECC, the CNG Association has decided to increase the CNG price by Rs6 per litre,” the sources claimed. So much so, the technical department of the Ministry of Petroleum and Natural Resources advised the CNG Association saying that the change in CNG pricing mechanism and permitting the CNG station owners to collect additional Rs6 per litre by selling CNG will be extremely an illegal act.

The said department has also asked the CNG outlet owners not to increase the price till the approval of the ECC. In the Sindh province, including Karachi, the local natural gas is supplied to the CNG stations by Sui Southern Gas Company Limited. The price of CNG is taken from the consumers under Ogra notification.

However, in Punjab, Re-gasified Liquefied Natural Gas (RLNG) is supplied to the CNG stations of which the price is deregulated owing to which CNG station owners decide them the price of CNG. At present, the country imports 400 million cubic feet LNG per day for Punjab out of which, 50 mmcfd RLNG is injected to CNG sector in Punjab.