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Sunday November 27, 2022

Sales slump: Outlets closed in Sindh as CNG soars to Rs300 per kg

The owners argued the gas has become unaffordable to be sold at such high rates, which has reduced their sales, while according to the CNG association chief, the cost of business has also gone up manifold

May 17, 2022
A CNG station. Photo: The News/File
A CNG station. Photo: The News/File

KARACHI: The CNG retailers in Sindh and Punjab have put up ‘we are closed’ signs outside their outlets after its price spiked to Rs300 per kg, which they claimed had drastically reduced their sales. 

“Majority of the CNG stations have been closed with only a few deciding to continue selling the gas to consumers,” said Sameer Anjum, Chairman All Pakistan CNG Association, talking to The News. 

“The Sindh owners have now followed Punjab, where the CNG outlets have been closed for the last two months.”

The owners argued the gas has become unaffordable to be sold at such high rates, which has reduced their sales, while according to the CNG association chief, the cost of business has also gone up manifold. He said the CNG stations in KP were running on local gas, while the number of outlets in Balochistan was very low. 

“Most of the CNG stations in the country operate in Sindh and Punjab and sell imported RLNG (Regasified Liquefied Natural Gas).”

The gas is being supplied to the CNG stations at Rs254 per kg and after the inclusion of Rs30 as electricity charges, the cost goes up to Rs285 per kg, said Anjum, giving a breakup of the cost. After adding Rs15 margin, the CNG stations would sell it at Rs300 per kg, he pointed out.

The CNG Association chairman said the cost of CNG supplied to the stations also included unaccounted for gas (UFG), which was eight percent for the Sui Northern Gas Company and 18.5 percent for the Sui Southern Gas Company. “It is a sheer injustice with the CNG stations as they are also paying for UFGs,” Anjum lamented.

About the demands of CNG stations, he said the government should bring the electricity tariff for the CNG sector at par with other industries and RLNG with the export-oriented sector. He pointed out that if the gas is provided to them at concessional rates like the export-oriented sector, the country could reduce the consumption of petrol in the country, saving foreign exchange worth a billion dollars spent on petroleum imports.

“17 percent GST is included in the price of gas supplied to the CNG stations,” Anjum said, adding the previous government had committed to bring it down to five percent, but it was not honoured. He also demanded the government supply gas to the CNG stations at $12-15 per mmBtu, whose landed cost in the country was $24 per mmBtu.

Abdul Sami Khan, Chairman Petroleum and CNG Dealers Association, also confirmed that 90 percent of the CNG stations had decided to close their operations and only 10 percent were operating.

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