10pc rise in gas prices: CNG stations decide not to pass on increase to CNG consumers

[Naveed Yaseen]

Naveed adds: I cannot but laugh on extremely stupid decision making by CNG station owners. Had they foregone a little part of obnoxious 40% margin earlier (its obnoxious because of large price-volume product), they might not faced this day. Govt knew they have room, and picked it. Now the margin has decreased and price is also in-competitive, lowering growth and sales volume.

CNG filling stations not to raise prices

Saturday, January 03, 2009
KARACHI: The CNG Station Owners Association of Pakistan (CSOAP) has decided not to pass on the 10 per cent price increase to CNG vehicle owners as this is unjustified.

President CSOAP Malik Khuda Baksh announced this while addressing a press conference at the Karachi Press Club on Friday. Sajid Abbas, Secretary and Javed Paracha of CSOAP were also present.

Baksh said that CSOAP members believed that it was unjustified to charge an increased price at a time when fuel prices have fallen substantially world over. He said that 33 per cent increase in gas prices in July 2008 by SSGC and SNGPL was fully absorbed by CNG station owners and dealers by reducing their profit margin.

He said that CSOAP executive committee has discussed and observed that the CNG sector as a whole consumes less than 6 per cent of the total gas output of SSGC and SNGPL. Baksh noted that the recent increase of 10 per cent in gas price will force CNG users to revert back to petrol which would be detrimental to the CNG industry.

The investments of more than Rs60 billion of middle and lower middle class people, who converted their vehicles to use cheap and environment-friendly CNG, would go to waste if the government does not revert the recent increase in gas prices immediately.

Members of the executive committee urged the government to continue the CNG policy of 1992, stating that any change in this policy would damage the CNG industry. Any change in the said CNG policy would discourage investment and result in political turmoil since it would force the middle and lower middle class to use higher-priced fuel, Baksh added.

President CSOAP pointed out that the CNG industry’s efforts to reduce the government’s burden of foreign exchange payments and huge savings of forex reserves resulted from switching to CNG use in vehicles.

CNG has resulted in savings of more than $250 million per annum of foreign exchange for Pakistan. CSOAP urged that in order to promote the use of CNG in vehicles a minimum price differential of 50 per cent needs to be maintained at all times so as to discourage people to use environment harmful and hazardous fuel in vehicles.

The executive committee, Baksh said, has stressed that the figures quoted by Advisor to the Prime Minister on Textiles were based on incorrect facts and said that the sector as a whole consumes less than 6 per cent of total gas output from SSGCL and SNGPL.

Malik said that the CSOAP had already informed about the facts and figures to the advisor on textiles in a recent meeting in Karachi. The correct figures would be verified through Ministry of Petroleum and Natural Resources and Oil & Gas Regulatory Authority (OGRA), he added.

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KARACHI: CNG Station Owners Association of Pakistan (CSOAP) has decided not to pass on the increase of 8 percent in gas prices to the CNG vehicle owners.

“CSOAP believes this recent price increase is unjustified especially at a time when the global prices of fuel have fallen substantially,” President CSOAP, Malik Khuda Baksh announced this decision at a press conference on Friday.

He said 33 percent increase of gas prices in July 2008 by SSGC and SNGPL was fully absorbed by CNG Station Owners and dealers by reducing their profit margins.

The executive committee discussed and observed that the CNG sector as a whole consumes less than 6 percent of the total gas output of SSGC and SNGPL.

He said the recent increase of 8 percent in gas price would force CNG users to revert back to petrol, which would be detrimental for the CNG industry.

The investments of more than Rs 60 billion by middle and lower middle class people who converted their vehicles to use cheap and environment friendly CNG would go to waste if the government did not revert the recent increase of gas prices immediately.

Members of executive committee of CSOAP urged the government to continue the CNG policy 1992 stating that any change in this policy would damage the CNG industry in Pakistan.

CNG has resulted in the savings of more than $250 million per annum of foreign exchange for the country. CSOAP urged that in order to promote use of CNG in vehicles a minimum price differential of 50 percent needs to be maintained at all times so as to discourage people to use environmentally harmful and hazardous fuel in vehicles.

In fact load shedding for CNG stations would bring more than 2.1 million vehicles to a halt and would aggravate the situation.

The executive committee requested the CSOAP president to send a request to the government to review the situation.

Baksh said CSOAP has sent the request to all higher officials and concerned authorities for meeting and reviewing the prices. The CSOAP also decided to wait for the government’s response on the subject and would meet again on January 5, 2009 for future line of action. staff report

http://www.dailytimes.com.pk/default.asp...009_pg5_10