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CNG Sector Proposes a 45% Reduction in Gas Prices

After a significant decline in the global crude oil market, the entire compressed natural gas (CNG) sector has called upon the government to slash the gas prices by at least 45% on an immediate basis.

Subsequent to this event, CNG Association Chairman Ghayas Paracha stated the following at a press conference yesterday:

As per the present pricing formula, 45% reduction in gas prices can be made. For two months, the public has been waiting for the gas prices to be lowered. It is high time that the government bring the gas prices down on urgent basis and the Petroleum Division and Oil and Gas Regulatory Authority (OGRA) should refrain from blaming each other.


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He further stated that gas prices can be brought down from Rs. 6,377 per million British thermal units (mmbtu) to around Rs. 318 per unit based on the current pricing formula.

As of right now, OGRA has fixed gas price at Rs. 637 per mmbtu for the entire consumer base, out of which, Rs. 541 consists of the cost of gas whereas only Rs. 96 entail other costs such as that of transportation, profit, loss, theft, etc. The biggest percentage in expenses is of the unaccounted for gas (UFG), which ranges from 6.5% to 11%.

Paracha repeated that the government should act swiftly in providing relief to the CNG sector from the subsidy burden of Rs. 646 per mmbtu.

He stated that, “If a just approach was to be favored, the gas tariff can be brought down to Rs400 per mmbtu. The CNG sector has borne the undue brunt long enough by paying the highest price for gas as well as bearing the highest taxes. Yet still, we saw that the gas supply was discontinued for three days in Sindh while gas pressure was kept low at 70% in Khyber-Pakhtunkhwa and Balochistan, which needlessly increased the operational cost even further.”