ISLAMABAD, Oct 25: Following an interim order issued by the Supreme Court on Thursday, the government reduced the price of CNG by up to Rs30.89 per kg with immediate effect as an interim relief for four days.

The relief for consumers on the eve of Eidul Azha will, however, cost the CNG station owners Rs22 per kg following the suspension of their operating cost and the government Rs9 per kg in the form of reduction in development surcharge and general sales tax.

As a result, the CNG price has declined by Rs30.89 (33.38 per cent) to Rs61.64 per kg from Rs92.53 for Zone-I, which comprises Balochistan, Khyber Pakhtunkhwa and Potohar, and by Rs30.38 (35.93 per cent) to Rs54.16 per kg from Rs84.54 for Zone-II, which comprises Sindh and Punjab. The overall gas sale price for CNG stations has been reduced to Rs618 per million British Thermal Unit (mmbtu), as prescribed by Ogra on July 1, from Rs700.50 per mmbtu being charged by gas companies from CNG stations since Oct 21.

“The relief will be for four Eid holidays,” Petroleum Secretary Dr Waqar Masood Khan told Dawn. He said the pricing formula would be worked out in detail after the holidays in consultation with the CNG industry.

As per an assurance given to the apex court, the government completely suspended the Rs20.80 per kg operating cost allowed in the sale price of CNG to consumers and another Rs4.98 per kg reduction in their net profit from Rs11.20 to Rs6.22.

The decision was taken at a meeting presided over by Adviser to the Prime Minister on Petroleum, Dr Asim Hussain. It was attended by Ogra Chairman Saeed Ahmad Khan and other senior officials.

An official said oil marketing companies had been asked to ensure that retailers with CNG outlets must comply with the decision immediately because it might be difficult for Ogra to enforce the reduced prices at independent CNG stations during Eid holidays.

The petroleum secretary had given an undertaking to the apex court that the government would do away with the weekly pricing of CNG, adjust cost of gas for the CNG sector after determination of prescribed price (sale of gas by gas utilities) on a six-monthly basis, bring down sale price for CNG stations to the July 1 level and suspend the 2008 memorandum of understanding signed with CNG owners on operating cost.

A source close to Dr Asim Hussain said the interim order if continued would make the CNG business unviable and help the government phase out CNG sector much earlier than envisaged. He said the decision could lead to a repetition of the outcome of sugar price fixing by the court two years ago because closure of CNG stations might trigger protests.

DEALERS’ WORRY: The All Pakistan CNG Association, which had welcomed the court’s order earlier in the day, immediately rejected the government’s decision, saying it was a violation and misinterpretation of the order.

Ghyas Abdullah Paracha, president of the association’s supreme council, told Dawn that the suspension of 2008 MoU by the government meant that Ogra would determine the sale price through a process of public hearing and then let CNG stations set their end-price independently. The MoU was partially suspended in violation of the court’s order, he alleged.

Secondly, he said, the court had required the government to fix gas price after an audit of the operating income and net profit of CNG stations and submit a report on Nov 1, but the government had reduced the price without an audit and by disallowing operational expenses like running of machinery on electricity and generators which was not possible.

Mr Paracha said the association would complain in the apex court against Ogra for fixing the prices under directives of the petroleum ministry, instead of acting like a regulator. He said the court would be requested to interpret its decision and compensate CNG station owners against losses caused by the government and Ogra’s decisions.

In reply to a question, he said the association had requested its members to sell CNG at reduced prices to facilitate consumers on Eid, but it was up to individuals whether or not they could bear the loss.

Lawyer Mohammad Ikram Chaudhry, who had filed the petition in the apex court challenging the weekly pricing of CNG, said transporters should proportionately reduce fare and traders prices of commodities to provide relief and benefit of the court order to the general public.

Otherwise, he warned, he would file another petition against them.