CNG sector seeks to import LNG to cut CNG prices by nearly half

ISLAMABAD: The CNG industry has offered to provide gas to the transport sector at half the current petrol/diesel prices if the government allows it to import Lignified Natural Gas (LNG), saving over billions in forex exchange.

For the time being, the sector officials said, the government should allocate at least 50 million cubic feet per day (MMCFD) of gas to the CNG sector till the private sector starts importing LNG.

“We can supply gas to public transport at rates 53 percent lower than petrol that will save around $2.1 billion on the import bill annually,” Ghiyas Abdullah Paracha, Group Leader All Pakistan CNG Association (APCNGA) during a media briefing.

“The textiles sector is getting the imported gas (RLNG) at much lower rates than the price the government is importing it from the international market. In every government, certain groups and industries are given benefits, while others that have the potential to save multi-billion dollars are deprived and even discouraged from importing LNG.”

Paracha said the government was importing gas at $25/mmcfd and selling it to these blue-eyed companies at $6.5/mmcfd; the difference was being added to the circular debt. “We want a level playing field.”

“All the CNG pumps in Punjab have been closed since December 7, 2021 as the government’s stopped supplying gas to them.”

Currently, the state-run companies Pakistan State Oil and Pakistan LNG Limited (PLL) have control over the LNG business in Pakistan that is crowding out the private sector to enter this business, despite the fact that the private firms had all the required NOCs and other permissions and agreements with the international companies for the supply of the LNG, the CNG body official said.

He added that the inclusion of the private sector would promote competition and ultimately benefit the consumers, but the government was not supporting them despite the sector’s 100 percent recovery rate and zero circular debt.

“The consumers had paid Rs16 billion during the last five years on account of capacity payments to the Gas Port LNG terminal being operated on an average 70 percent capacity. The Gas Port has an LNG terminal with a capacity of 750 mmcfd gas, whereas the government has a 600 mmcfd LNG allocation so there is 150 mmcfd capacity in hand but the government companies had made it impossible to utilise this capacity.”

He said that over the last few years, half-a-dozen local and foreign companies were issued gas import licenses but to no avail.

“These companies were Shell, EnerGas, Universal Gas Distribution, Tabeer, Trafigura and PGDC. Of them, some companies’ licences have expired and others did not renew them because of this lackluster attitude.”

Paracha said he wanted to present this plan before the incumbent government to help put the country’s economy back on track, save the foreign exchange reserves under the head fuel import bill, and provide massive relief to the general public in the form of 50 percent cut in the public transport fares, creating job opportunities and minimising the environment pollution by ensuring gigantic reduction in the carbon emissions with the use CNG as a fuel for motor vehicles.

The government should allocate at least 100 MMCFD gas to the CNG sector till the commencement, said Paracha.

“Revival/expansion of the CNG sector can generate thousands of new employment/job opportunities, while the use of CNG as an alternative fuel for motor vehicles is equivalent to having an environmental benefit of 152.63 million trees per annum,” he added.