In the recent years, Compressed Natural Gas (CNG) has emerged
as an important substitute of petrol and oil thus relieving the foreign exchange
burden on the national exchequer as well as on consumers. But recently 15 per
cent imposition of GST on CNG kit has drastically brought down the level of
conversion from petrol-run vehicles to CNG.
Talking to PAGE Kursheed A Farooqui, Manager Stanley
House Industries (Pvt) Limited, a leading CNG company, said, due to the decision
by the government to increase the prices of CNG kit from Rs 25000 to Rs 28750
has adversely affected the increasing trend of conversion of vehicles from
petrol to CNG by the general public. The rate of conversion to CNG has declined
by 80 per cent approximately, with the GST on CNG kits, the government is losing
GST on sale of natural gas. In the present scenario when government is claiming
to promote the use of CNG in the country, this decision seems absolutely
contradictory to their claims, he added. He said that due to the 15 per cent GST
on the CNG kit has increased the cost which will definitely put burden on common
He said, CNG is 100 per cent locally produced commodity which
is derived by compressing common natural gas largely produced in Pakistan. We
import bulk of petroleum products for our usage as against CNG which is a
contributing factor in lowering the import bill is denied its rightful place to
contribute according to its might. According to the official sources Pakistan
spends $2.5 billion annually on the import of oil .
Khursheed said that CNG first time was adopted in 1982 but
real trend was actually emerged some 7 or 8 years back but now demand has
increased so drastically that we are incapable to meet the demand. During last 3
years 15 stations have been opened in Karachi. Currently 79 CNG stations across
country and nearly 13 million cubic feet of gas is being used in the country.
He described CNG as the most economical for instance per
liter of petrol costs 29.50 but CNG costs 13.60 per cent almost 50 to 60 per
cent cheaper than petrol. Second most important reason to use CNG that it is
environmental friendly as it does not contain lead and other harmful content, he
added. So due to its number of benefits it is highly recommended to spread the
prevalance of CNG. He also pointed out the fact that the percentage of accidents
in CNG vehicles as compared to car running on petrol is almost zero. Although
some cases were registered in this regard but that was due to the substandard
cylinder and poor installation not due to CNG itself.
He demanded that GST on gas kit should be lifted to restore
the CNG culture in the country for the interest of public in particular and
whole country in general. He further said that GST on filling is rational and we
do not demand for its abolition but GST on kit is a great detriment for the
promotion of CNG culture in the country.
By converting 100,000 cars to CNG, the country can replace
140000 tonnes of gasoline per year about 11 per cent of the total supplies which
will save about $30 million per year. If the present transport system is
transferred to CNG based then the level of petroleum and oil import will come
down. He also denied the possibility of the shortage of CNG in future because we
have strong reserves base that are enough for a long time and more deposits are
expected to discover in future.
Recently government has launched $700 million plan to promote
the use of CNG and to establish CNG based transport system which includes both
foreign and local investment. This plan aims at conversion of over 2500000
vehicles in the country to CNG and to build 250 new CNG stations across Pakistan
in next 5 years. So far in the last two years it has created an investment of
$50 million and 2000 jobs in last two years. The plan is really good but besides
this government should also take rational steps to enhance the current use of
He advocates that CNG based system is prerequisite and should
be adopted on priority basis because it can bring down expenditure, it is
economical and foremost it is totally locally produced. He criticized the
decision of the government to impose 15 per cent sales tax on CNG kit,
government should abolish it altogether and provide relief to the consumers.
Importance of CNG can not be denied being the most effective
economical, popular and safest substitute of petrol and oil. Government should
give different incentives to import CNG related equipments and machinery.
Specially for the countries like Pakistan where the public is already under the
burden of sky high prices of petrol and oil.