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KARACHI: CNG station owners have started to feel the pinch as many consumers shift to petrol which is being sold at Rs63 per litre as compared to gas which is available at Rs67 per kg.
The cut in petrol prices has shrunk the saving level of vehicles running on CNG to 25-30 per cent.
Car owners with CNG kits enjoyed over 50pc savings when petrol was traded above Rs100 per litre from April 2012 onwards.
The highest petrol price from 2003 to date was recorded in October 2013 when fuel was sold at Rs113.24 per litre. Since November 2014, petrol prices started to drop from Rs100 per litre.
CNG dealers complained about the 20-45pc decline in sales depending on pump location.
The government, while boosting the CNG sector, had assured stakeholders of maintaining 50pc differential parity between petrol and CNG prices.
Petrol price has come down to Rs62.77 per litre from March 1 while the retail price of CNG in Sindh is Rs67.50 per kg, Rs75.82 per kg in KP and Balochistan whereas in Punjab it is Rs47 per litre on RLNG.
Hence at present, with no price differential parity, CNG is not lucrative for the masses. CNG still has potential customers including rickshaws, taxis, pickups, buses and public transport.
Pump owners said operational costs have increased manifold in comparison to previous years. Many pump owners are running their outlets on generators in case of power failures.
“Our sales declined by 40-45pc in the past few days due to low petrol prices,” All Pakistan CNG Association (Sindh Zone) Chairman Shabbir Sulemanji said.
He claimed reduction in CNG consumption in Sindh from 90 million cubic feet per day (mmcfd) to 75 mmcfd since petrol price came down to Rs62.77 per litre.
Meanwhile, an official of Sui Southern Gas Company Limited (SSGCL) said CNG consumption in Sindh was around 90-100 mmcfd.
However, he did not give details about the current consumption levels following the increase in petrol sales.
Petrol sales have increased by 24 per cent in the last eight months.
Sulemanji said any further cut in petrol prices would play havoc with the sector which is bogged down by GST and Ogra’s pricing distortion formula to determine CNG retail rates.
The oil price fall internationally brought down prices of various commodities including petroleum products but CNG still remains costlier, he added.
Gas prices are linked with international crude oil prices.
He said CNG station owners are currently suffering because of high gas tariff levied at Rs700 per million British thermal units, followed by high GST, withholding tax and GIDC, resulting in higher retail prices.
Sulemanji said transporters cannot pass the relief of cheaper petrol and diesel to consumers as most public transport runs on CNG.
He urged the government to immediately reduce local gas tariff in accordance with the falling petrol prices and international gas prices to maintain a reasonable price differential between petrol and CNG.
Published in Dawn, March 9th, 2016
