The price of compressed natural gas (CNG) spiked on Saturday to Rs184 per kilogram in Sindh and Rs123 per liter in Punjab. The prices saw an increase of Rs15 per kg in Sindh and Rs8 per liter in Punjab.
The new rates notified by the CNG association came into effect on Saturday.
All-Pakistan CNG Association Group Leader Ghayas Paracha said, “The government procured liquefied natural gas (LNG) from the international market at very high rates because of on-the-spot buying of the LNG cargo,”.
He further added, “However, the good thing is that the price will start lowering from the next month since the government would get two LNG cargoes each month from Qatar under a long-term 10-year agreement,”.
According to Paracha, there are numerous other factors that contributed to the price hike including the increase in general sales tax on imported LNG which jumped from 5% to 17%. Another factor is the levying of 5pc custom duty on LNG import as well as the currency depreciation against the dollar which has touched around Rs171.
Paracha said, “The aforementioned factors are behind the increase in CNG prices that are being revised each month,”.
He said that recently in a meeting, the association’s delegation which was led by him urged the finance minister to permit the CNG sector to import LNG. Paracha added, “We justified our case well by explaining that there will be an impact of Rs82 billion on the import bill if we import at least 50 million cubic feet per day LNG under private contract directly,”.
“The minister was satisfied with our explanation and directed the departments concerned to resolve the issue,” Paracha stated.
While answering a question Paracha said the government must provide the LNG imports with an exemption from sales tax if it wanted to reduce the CNG prices. “We demand the government exempt the sales tax on LNG imports, like petrol and LPG, to ensure the provision of the fuel at cheaper rates,” he remarked.
