CNG Industry offers 53% Cheaper gas for Vehicles

The CNG industry unveiled a plan to save $2.1 billion in import bills by providing 53 per cent cheaper gas than vehicle petrol. It may be possible if the government facilitates the import of LNG.

Even though all regulatory requirements are in place, government companies still monopolize LNG import and distribution.

In the last five years, consumers have paid Rs 16 billion as capacity payments to the Gas Port LNG terminal, operating at 70 per cent capacity.

Moreover, Gas Port has a 750 mmcfd LNG terminal capacity, whereas the government has a 600 mmcfd LNG allocation. In addition, it has 150 mmcfd capacity available, but government entities are preventing its utilization.

Offer to provide 53% Cheaper Gas

“We can offer 53 per cent cheaper gas for public transportation on CNG stations compared to petrol, “says Ghiyas Paracha, Group Leader of the All Pakistan CNG Association (APCNGA), during a press conference on Tuesday.

Gas at CNG stations would be 53 per cent cheaper even if the government withdraws all fuel subsidies.

Specifically, he said it would help reduce circular debt in the energy sector that crosses Rs 2000 billion.

The government can save around $2.1 billion annually if it allows at least 50 Million Cubic Feet per Day (MMCFD) of gas to the CNG sector until private companies are able to import LNG) for the CNG outlets.

Ghiyas Abdullah Paracha, Group Leader of All Pakistan CNG Association (APCNGA), made these revelations on Tuesday during a media briefing.

Parach said he wanted to present this plan before the incumbent government to put the country’s economy on track.

He said it would help to save the foreign exchange reserves by approximately up to 2.1 billion dollars annually under the head fuel import bill.

The plan will also promise massive relief to the general public in the form of a 50 per cent cut in the public transport fares.

It will create job opportunities and minimise environmental pollution by ensuring a massive reduction in carbon emissions with the use of CNG as a fuel for motor vehicles.

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

Ghiyas Abdullah Paracha also said that CNG is still cheaper than the prevailing petrol price while its price will be lower than petrol price if the private sector is allowed to import LNG for the CNG sector of the country.

According to Ghiyas Paracha, at present, the CNG is 10.4 pc cheaper than the prevailing price of gasoline in the country.

He also said that if the government allows the private sector to import LNG for the CNG sector, then the country can save around $2.135 billion (PKR 419.87 billion) with the import of 300 Million Cubic Feet per Day (MMCFD) LNG to the country.

It will save enable the CNG industry to provide gas cheaper by 18.631% than the current gasoline price.

Quoting finance minister Miftah Ismail’s target of reducing 22 billion dollars during next year (FY 2022-23) out of the total deficit of 42 billion dollars, the APCNGA Group Leader said that the private sector could help meet this target by approximately 10% only if the government allows the private sector to bring LNG for the CNG sector and utilize the unused LNG terminal capacity.

Use of terminal Surplus Capacity

Ghiyas Abdullah Paracha also urged the government to use the surplus (private) terminal capacity of LNG terminals and authorization for using unused contracted terminal regasification capacity of the LNG terminals.

Similarly, the Federal government should direct all provincial chief secretaries/transport secretaries to encourage the owners/transporters to convert their public service vehicles to environment-friendly and cheaper CNG fuel.

In addition, he called for revising the gas allocation priority list by taking all stakeholders on board. Furthermore, support the CNG sector by giving businesses a level playing field.

Samir Gulzar, the Central Chairman of APCNGA shared details of CNG Stations established across the country with an investment of approximately Rs 350 billion.

Energy Minister assures to resume gas supply to CNG Sector

He said that the CNG industry had established a total of 2300 CNG Stations in the country. Out of which 1100 CNG Stations are located in Punjab, 600 CNG Stations are situated in Sindh, and 575 CNG Stations are operating in Balochistan province.

He said approximately 50pc of the total CNG Stations of Punjab Province had suspended their operation due to the non-availability of gas.

CNG industry leader also said that the Rs 150 billion investment made in developing the CNG kits has been facing danger due to the closure of CNG Stations and the non-availability of gas as a fuel for motor vehicles.

He said direct and indirect employment in the CNG sector is 5.1 lakh. Total gas consumption required by the entire CNG sector is 400Million Cubic Feet per Day, said Ghiyas Abdullah Paracha.