CNG stations fleece consumers by Rs 4.75 billion in 20 days

[Naveed Yaseen]

MUHAMMAD ALI
KARACHI (July 21 2008): The CNG station owners here have fleeced the consumers by Rs 4.75 billion since July 1, 2008, as the whole industry is in the state of disorder.

Though the Oil and Gas Regulatory Authority (Ogra) had recommended to regulate the CNG tariff at Rs 43.25 per kg and to take stern action against those CNG stations owners who were involved in overcharging price or any other violation, the Ordinance in this regard has not yet been amended.

All CNG associations have refused to sell CNG at Rs 43.83 per kg, which has been fixed after escalating natural gas tariff. They argued that CNG is a privately owned industry and the law empowers station owner to fix CNG selling rate as per station expenditures. They termed government decision in this regard as unjustified act. This has created immense confusion among all stakeholders.

The associations further claimed that the government had miscalculated the revised gas tariff hike at Rs 5.58, and added that actual hike in gas rate is Rs 6.35. Besides, they announced to sell CNG at the rate of Rs 47.25 per kg, instead of Rs 43.25, with the result that consumers are compelled to paying an extra amount of Rs 4 per kg.

According to Economic Survey Report (ESR) 2007-08, there are 2068 CNG filling stations and around 1.7 million cars have been converted into CNG. If the cylinders of two-third of total converted vehicles were filled an average five kg, the gas station owners earned windfall profit of Rs 4.75 billion in just 20 days.

Official sources told Business Recorder on Saturday that natural gas is being provided at very nominal rates to CNG stations, including all levies, which is just Rs 15.513 per kg aimed to encourage cheaper and environment-friendly fuel as an alternative of liquid fuel.

They, however, said that consumers are paying more than 200 percent excess amount to purchase it, terming it as unjustifiable and added that CNG stations owners are misusing the government's facilitation, which has been granted only to promote CNG fuel for reducing import bills. Even if all expenditures, including electricity charges, wages, maintenance, etc were calculated on the higher side at Rs 15 per kg, the profit would still be more than Rs 17 per kg, which should be cut down by the concerned authority, they urged.

They said that the decision to fix the rate at Rs 43.25 per kg was justified, as it favoured both the industry and the consumers.

They urged concerned authority to take strict action against those violating this decision and stressed the need of evolving stern policy to regulate CNG industry, which facilitates consumers in the long run.

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