Gas supply to CNG sector can reduce circular debt

ISLAMABAD: The compressed natural gas (CNG) industry can reduce the rising circular debt by Rs1,500 billion/annum only if it is supplied the required gas and provided a level-playing field to run the businesses, said Ghiyas Abdullah Paracha, a senior leader of the All Pakistan CNG Association.
Currently, the CNG sector is getting the gas from the government at an expansive price ranging between $13/MMBTU to $20/MMBTU, while the government is supplying the gas to all other sectors at the rate ranging between $3/MMBTU to $8/MMBTU, he added.
The government must immediately take a policy decision regarding restoration of the gas supply to the CNG sector to save the national exchequer from the additional burden of the ever-increasing circular debt that had crossed Rs2 trillion in the energy sector and also to save the skin of the already burdened public from the mounting oil prices in the global market, he said.
Instead of supplying gas to the CNG sector, the government is supplying gas to those sectors, which are also getting heavy subsidies, said Paracha.
He urged the government to immediately open the CNG stations in Punjab, which are closed for the last seven months (December 7, 2021 to-date) to save the public from the impact of the rising oil prices in the international market.

The government can save $2.1 billion/annum in import bill if it facilitates the private sector in the liquefied natural gas (LNG) import, while a 50 per cent reduction in the public transport fares is also possible only if the government restores local gas supply to the CNG sector, he said, adding that the revival of the CNG sector can generate thousands of new employment opportunities, while the use of CNG as an alternative fuel for motor vehicles is equivalent to having an environmental benefit of 152.63 million trees/annum.
For Paracha, CNG is still cheaper than the prevailing petrol prices, while its price will be cheaper than petrol if the private sector is allowed to import LNG for the CNG sector of the country.
Ironically, expensive re-gasified liquefied natural gas (RLNG) is supplied to those sectors, which are getting the subsidy and they are not paying the price of RLNG on time, while the CNG sector is ready to pay full price of gas on time but it is denied RLNG to run their businesses, which were established with the hard earned investment of approximately Rs350 billion by the people of the country.
A total of 2,300 CNG stations have been established in the country, of which 1,100 are located in Punjab, 600 in Sindh, 575 in Khyber-Pakhtunkhwa and 25 CNG stations are operating in Balochistan.
At present, approximately 50 per cent of the total CNG stations in Punjab have suspended their operations due to the unavailability of gas.
Similarly, Rs150 billion worth of local investment so far made in developing the CNG kits has been facing serious danger due to closure of the CNG stations and unavailability of gas as a fuel for motor vehicles.