Research Analyst
May 21 - 27, 2012


1991-92 95,661 25 2001-02 151,416 7,369
1992-93 102,991 31 2002-03 164,968 11,320
1993-94 100,631 43 2003-04 193,395 15,858
1994-95 104,098 47 2004-05 226,116 24,443
1995-96 111,202 153 2005-06 278,846 38,885
1996-97 110,365 358 2006-07 306,600 56,446
1997-98 115,250 490 2007-08 322,563 72,018
1998-99 121,431 2,182 2008-09 319,003 88,236
1999-00 134,916 2,426 2009-10 - 71,225
2000-01 138,503 4,423 2010-11(p) - 81,400

The world is facing an energy crisis. Throughout the world, there is a shortage of fuel. Fuel is an important part of our day to day lives. It is used for various residential and commercial purposes. However, with the fast depletion of fuel reserves, it has become imperative to find an alternative that can be used as efficiently. The fuel is mainly used for propelling vehicles of different kinds. Compressed natural gas (CNG) is nothing but a fossil fuel that can be used as a substitute to gasoline and diesel. CNG vehicles have become quite common these days, and are much cheaper to maintain compared to vehicles that run on gasoline. The only problem with CNG is that a vehicle runs fewer miles on a tank of CNG compared to a tank of fuel.

CNG offers several advantages. A key factor behind using CNG in vehicles is to reduce the amount of pollution. The combustion of fuels like gasoline produces a lot of pollution, which harms the environment. To save the environment from the adverse affects of pollution, the governments of many countries have switched to CNG vehicles for public transportation.


Iran 2.86
Argentina 2.07
Brazil 1.7
India 1.1
Italy 0.78
China 0.61
Colombia 0.36
Uzbekistan 0.31
Thailand 0.30

Driven by growing concerns over environmental pollution, and the unrelenting hikes in fossil fuel prices, world natural gas vehicle population is projected to reach 19.14 million units by the year 2012. Evolving breakthroughs in innovative technologies for alternative fuels, and the stringent environmental regulations on vehicle emissions, are expected to emerge into the two major factors driving the market's growth in the medium to long run.

Currently, Pakistan is the largest market of CNG with a huge network and infrastructure of over 3500 CNG filling station, which serve around three million vehicles including 630,000 cars with factory-fitted CNG cylinders. In an effort to reduce dependency on expensive imported fuels as well as improve the environment the use of CNG in vehicles has been encouraged.

The government is losing $6 million foreign exchange a year from CNG kit manufacturing companies that are exporting around 60,000 kits to Afghanistan, Italy, Thailand, China, Brazil, Iran, and Bangladesh.

Last year, one of the major players alone has exported 51,000 CNG kits worth Rs135.6 million and contributed around 70 million rupees in terms of taxes and duties on parts import and the kits' export. It may be estimated that nearly 50 per cent of the components of CNG kits are being manufactured locally. Therefore, the government's decision of banning CNG is having adverse impacts, in terms of financial losses and employment, on both the companies and their associated vendor industry, which comprises of leading car manufacturers and tri-wheeler manufacturers. Moreover, this decision is making way to erode all heavy investment made by such companies and contribution to the national exchequer. The international community including Italy and Argentina, which is already surprised by many ironic decisions of the Pakistani government, has once again showed its amazement on this decision of the government.

The government of Pakistan has placed a ban on fitting CNG kits in new cars. Furthermore, the original equipment manufacturers (OEMs) have sold over 0.6m CNG fitted vehicles in the last ten years.

On the other hand, the government should take gas from higher gas consumption sectors, which can be helpful to generate sufficient electricity. The use of gas generators is banned on CNG stations while industrial sector is continuously using heavy gas turbines and generators.

The gas load shedding to CNG will only increase the problems for public but will not decrease electricity load shedding because CNG sector using only seven per cent of total gas which can generate only two per cent of electricity. So, there is no benefit for gas load shedding to CNG stations.


The ministry of petroleum and natural resources has made an unprecedented hike of Rs9.93 in the price of compressed natural gas for Karachi and Lahore. In Islamabad and Peshawar regions, the hike will be as high as Rs11.58. The new price, notified by OGRA for Region-I Khyber Pakhtunkhwa, Potohar region and Balochistan, is Rs88.70 per kg and for Region-II Sindh and south and central Punjab Rs80.89. The increase has been made to keep the CNG prices at 55 per cent of those of petrol and gas infrastructure development cess (GIDC) on CNG has also been increased.


The government should lift the ban on CNG stations as it would be a great damage to this industry and will also create massive unemployment. The increase in prices is illogical and unacceptable and it will trigger a storm of inflation. The government has not yet come up with a definitive pricing formula. CNG consumers have already been disturbed by three days of load shedding and now the price hike is not less than a calamity for them.