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The increase in prices of CNG kit

It will discourage CNG culture


Aug 28 - Sep 03, 2000

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 man.

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 CNG.

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.