Rise in CNG price by Rs7-10 per kg on the anvil

ISLAMABAD: The Oil and Gas Regulatory Authority (Ogra) is likely to increase the CNG price by Rs7-10 per kg in the new pricing formula after making the operating cost zero following the Supreme Court’s order.

The Supreme Court, on October 25, zeroed the operative cost of Rs20.80 per kg on the Compressed Natural Gas (CNG) that entrepreneurs of CNG stations were getting since 2006 and massively lowered their profit margin by Rs4.98 per kg from Rs11.20 to Rs6.22.

Now Ogra may increase the CNG price by Rs7-10 per kg after increasing some operative costs under the new pricing formula, which is being worked out.A top official told The News that day-long hearings were held here on Tuesday by the Ogra on the new pricing formula of CNG. “Ogra has prepared two proposals for the new pricing formula that will be tabled before the Supreme Court for approval.”

The Chairman of All Pakistan CNG Association, Ghiyas Paracha, during the hearing, said that his association would abide by the formula if it was based on justice and take care of the legitimate rights of CNG stations.

The hearing that was held with the Ogra chief Saeed Ahmad Khan in the chair examined and reviewed the operating costs of CNG and profit of the CNG entrepreneurs.

Paracha pleaded during the hearing that it was not the profit but ensuring provision of CNG to masses at affordable prices was their priority. He claimed that his industry had foiled a conspiracy under which the gas supply was to be halted to CNG stations, by providing CNG gas to the people at reduced prices during the Eid holidays. However, he demanded that they should be compensated for the loss CNG industry had sustained during the last five days because of extending zero operating cost, terming it sheer injustice to them.

Paracha, during the hearing, said that the Ogra had wrongly interpreted and implemented the verdict of the apex court and that’s why the notification issued by the Ogra on October 25 was illegal and carried no weight.

Paracha warned of closing down the CNG stations at the existing prices and demanded that the pricing formula be formulated as per international standards. He pointed out that Ogra’s amended ordinance had elapsed and was no more effective under which the regulator could fix the CNG prices.

Abdul Sami Khan, Chairman of CNG Dealers Association, said that they had set up the CNG stations under the directives and policy of the government and they could not run the stations any more without the operating cost. “If the operating cost, which has been zeroed, is not increased, then we would prefer to sit at home,” he said.

However, the chairman Ogra after the hearing said that the decision taken on October 25 was absolutely right and it could not be termed as a wrong interpretation of the Supreme Court’s order. He said that the Supreme Court verdict should be implemented in its true spirit.

The chairman Ogra also said the regulator will not keep in mind the loss of any stakeholder and relief to other stakeholder while determining the new pricing formula for CNG, rather it would be justice and a win-win recipe for all the stakeholders.

He said that the existing prices of CNG may continue till December 31 or when the new decision of the Supreme Court was given.