ISLAMABAD-All Pakistan CNG Association has demanded 45 percent reduction in gas prices and threatened to close all the CNG stations across the country and to launch a movement to reduce gas prices and stop corruption in the sector.

A 45 percent reduction is possible in the gas prices under the present gas pricing formula but masses are being deprived of low gas prices for two months, said representative of All Pakistan CNG Association (APCNGA) while addressing a press conference here.

All Pakistan CNG Association central leader Ghiyas Abdullah Paracha said that the Petroleum Division and OGRA should stop playing with each other and cut the gas prices immediately.

He said that meeting of APCNGA central executive committee was held in which recommendations were finalized and a working group was formed. It was decided that all the CNG stations across the country will be closed and a movement will be launched along with the representatives of other industries to reduce prices and stop corruption in gas sector if the gas prices were not reduced for the cng sector and all other consumers.

He said that gas prices can be reduced from Rs6377/mmbtu to almost Rs318/mmbtu if the present gas pricing formula is applied. Giving the details, he said that OGRA has fixed gas price at Rs637/mmbtu for all the consumers in which Rs541 is the cost of gas while Rs96 is for of transportation, profit, losses, and theft, etc. Meaning thereby that 85 percent is the cost of gas and 15 percent are other expenses. The highest share in expanses is that of UFG which is from 6.5 percent to 11 percent. Gas price is linked to the price of crude and High Sulphur Furnace Oil (HSFO) in the international market.

There are almost 48 gas wells in the country. Almost 20 wells that were operational before the year 2000 are linked to crude while almost 28 wellheads are linked to HSFO. The average price of crude was $61 in May 2019 while the US dollar was available at around Rs150. The price of HSFO was almost $391 per ton.

The dollar was available during May 2020 at around Rs160, crude slipped to almost $37 while the price of HSFO fell to almost $150. The crude was almost 40 percent cheaper and HSFO was 50 percent cheaper.

Therefore, if the cost of gas which was Rs541/mmbtu is reduced by 50 percent the tariff will become Rs318.50 while Rs96 are other expenses. A justified approach can bring down gas tariffs to Rs400/mmbtu.

Govt should relieve the CNG sector of Rs646/mmbtu subsidy burden. The tariff for the CNG sector is Rs1283 while the price of gas has been determined at Rs1283 by OGRA. The difference of Rs646 is used by the government to provide subsidies to other sectors for which CNG sector is burdened. CNG will become 60 percent cheaper than petrol if the subsidy is removed and gas tariff is reduced. He said that reduced gas rate and abolishing unjustified subsidy can reduce CNG tariff by 75 percent. The petrol price has been reduced by 38 percent, from Rs117 to Rs72. The gas prices can be reduced by 60 percent in Sindh, KPK, and Balochistan according to this proportion which will make CNG 40 percent economical as compared to petrol.

Private import of LNG will provide economic gas to masses in Punjab. Some companies want to continue their monopoly.

Presently LNG is available at the cheapest price in the world, but the local consumers are paying the highest price in the world as transport of gas and other costs are highest in the world. He said that the government should immediately allow private companies to import LNG on their own risk.