Out of the total vehicular population
which is roughly estimated around 2.5 million, over one million vehicles have
switched over from oil to CNG till to-date while the remaining ones are also in
the pipeline in Pakistan.
This indicates the gigantic growth in
CNG consumption making it as the third largest consumer of natural gas around
In fact, the CNG has assumed a role of
economic savior otherwise the ever increasing oil prices would have washed off
all the economic gains the country has achieved so far. It is the availability
of the CNG which has saved the economy at least $2 billion this year as the
motor gasoline, diesel, fuel oil consumers in the transport, power generation
and industrial sectors have opted for gas fired system.
Malik Khuda Bukhsh, Chairman, CNG
Stations Owners Association told PAGE that in fact the benefit of CNG use to the
common man is in the pipeline and the days are not far away when the country
will come out of the vicious cycle of the costly oil.
It is the CNG which is leading rally of
economic growth in Pakistan and hopefully the volume and magnitude of its
application is bound to bring prosperity to every corner of Pakistan.
At present there are 782 CNG stations
all over the country while around 160 CNG outlets are operating in Karachi.
Malik Khuda Bukhsh feels that the existing number of CNG outlets are quite
capable to cater to the need of Karachi. When his attention was drawn towards
the long queues in front of the CNG stations waiting for their turn to get
filled their vehicles, he came out after a confident laughter that people are
looking at a darker side of the picture. Actually when people had started
establishing the CNG outlets they had no idea about the unusual growth in demand
of CNG. Hence they installed the compressors of low pressures. Now the situation
is completely changed and every CNG station is getting equipped with the most
modern and powerful compressors, which take hardly a minute to accomplish the
He categorically brushed aside the idea
that the gas connections to the CNG stations were provided from the domestic gas
network. He said actually under a policy, the CNG connection is given from the
industrial gas network, which has enough capacity to feed the requirement of the
CNG stations. If the premises of an outlet is not near to the industrial line
the application for a new connection is not approved.
Pakistan is going to attain a position
as the second largest user of compressed natural gas (CNG) in the world by June,
2006. At present, the growth of the country's CNG sector is very rapid and the
sector has achieved a large infrastructure in a short span of time.
During last financial year, the
exchequer saved foreign exchange of $1.38 billion on account of refined
petroleum products, he said, adding that lots of efforts are needed to save more
money, as we have planned to manufacture CNG equipment in the country to avoid
dependency on other countries.
Quoting the example of India, Malik
said that in the last two years, it had established its own manufacturing plant
of CNG cylinders in India and in Dubai to capture international market as well
as to meet the country's growing demand.
Some Indian cities have become
smoke-free through a Delhi High Court order, which gave them a very short span
of time to convert all commercial transport into CNG including large buses.
In Pakistan, the government is also
moving towards that end to declare all the major cities as CNG consuming areas.
This will bring three pronged benefits including an effective control over
pollution, reduce import bill and above all to curtail inflation through
reduction in cost of production.
It may be recalled that zero-rated duty
on the import of complete knock down (CKD) kits of CNG and Euro-II buses was
allowed in the federal budget 2005-06. The decision of zero-rate duty on CNG
related equipment propelled an investment of $200 million in the CNG sector.
About the quantum jump in the price of
CNG kits which had taken a leap from Rs18,000 to the current price of
Rs28,000-Rs30,000, he said that actually the growth in CNG demand is not
confined to Pakistan alone, actually it has an overwhelming growth around the
world. He disclosed that only two companies produce cylinder tubes for the CNG
kits all over the world. Unlike Pakistan, some of the countries contacted those
cylinder producers and booked the entire produce on cash payment that was the
reason for creating a short supply of cylinders. It was the short supply, which
led to abnormal growth in CNG kits and cylinder prices.
Actually there was no short supply of
kits, it was the cylinder which was in short supply, the price of kit in fact
has declined by Rs500 due to non-availability of cylinders. The situation is
however improving and the shipments of kits are due by the end of December,
which will certainly help reduce prices of the CNG kits considerably.
Another major development in the CNG
sector, he disclosed, was the local production of the CNG kits by two companies
in collaboration with international kit producers. The OGRA has approved the
standard of the CNG kits and currently these locally produced kits are in Canada
for further laboratory tests. These locally produced kits when start commercial
production would naturally ease the demand and supply situation to a great
extent in Pakistan.
Malik Khuda Bukhsh, who is also the
member of the standing committee for Iran gas pipeline project, said that things
are moving in the right direction as the pipeline projects despite all odds are
in its final shape now. Since the economy of Pakistan is in a turnaround
everybody is willing to finance the cross border pipeline project. It means that
even if India declines to join the project Pakistan is determined to go ahead on
its own. He disclosed that delegations from Iran and India are due in Pakistan
during third week of December in which some of the clauses, which have been
agreed by all the parties, would be ratified.
Actually, the government is determined
to finalize the gas pipeline project as early as possible on the back of
pressurizing demand growth for the natural gas in Pakistan. The liberalized
imports of vehicles, and liberal policy for financing cars by the leasing
companies and commercial banks have opened a flood gate for the influx of
vehicles in Pakistan.
According to Malik Khuda Bukhsh, as
compared to 2.5 per cent growth rate of vehicles, the growth rate has taken an
unbelievable jump during last three years. He said that during the current
financial year the growth of new vehicles registered 128 percent, while it was
93 and 62 percent during last two years, respectively. This speaks about the
magnitude of vehicle population in Pakistan. On the back of this unusual growth
we have to look into the aspects which need immediate attention of the policy
makers. In this connection, the supply side of natural gas is being reinforced
from all resources including imports and speedy development of local resources.
In order to avoid huge import bill on account of petroleum products, CNG fitted
vehicles have been given incentives of duty consumption and reduced taxes on CNG
stations. Under this scheme, Karachi will have 8000 CNG buses for which the city
government has been given the task.
Road network is also being redesigned
to accommodate the growing population. He said that once we get away with the
costly fuel oil, the country will be saving over $5-6 billion, besides reducing
cost of transportation and industrial output.
He expressed the hope that we are on
the road of prosperity and within a period of four years things will take a
better change Inshallah.