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Instant supply of 50MMCFD of natural gas for re-sale: If given opportunity, CNG sector can provide annual benefit of $778.93m: Paracha

By December 8, 2022December 19th, 2022No Comments

 Published December 8, 2022

ISLAMABAD: Instant supply of 50 Million Cubic Feet per Day (MMCFD) of local unutilised natural gas to the Compressed Natural Gas (CNG) Stations for its re-sale to the motor vehicles can benefit by approximately $778.93 million annually to the country.

Ghiyas Abdullah Paracha, a senior leader of the CNG Association said that immediate supply of only 50MMCFD of indigenous unused natural gas to the CNG stations for its re-sale to motor vehicles can save the country’s precious foreign exchange of approximately $587.26 million per annum and the government can generate approximately $191.7 million/annum.

“While having a 25 years long experience in the gas sector I can ensure $200 million worth benefit to the country within one month with available resources if an opportunity is given to me,” said Paracha.

He added that he was ready to prove his claim on every forum and wanted the government to give a level playing field to the CNG industry to run its business for saving precious foreign exchange and also for steering the country out of the ongoing energy crisis.

The senior leader of the All Pakistan CNG Association also said the CNG sector had the full capacity to immediately provide cheap, alternate and eco-friendly fuel to motor vehicles as CNG stations were established across the country.

“The CNG industry is ready to offer a cheaper eco-friendly fuel of CNG to the motor vehicles in order to provide immediate relief to the public and the national exchequer as well,” said the senior leader of the CNG association, adding that CNG stations were established across the country, and vehicles also already got fitted CNG kits while oil prices were touching the record high level so the government should focus on CNG sector to provide cheap fuel for the motor vehicles plying on roads.

“We have submitted our working to the government regarding billion rupees worth of saving in foreign exchange reserves and hefty revenue generation for the national exchequer with the use of stranded local natural gas in motor vehicles as a fuel instead of petrol,” said Paracha.

Sharing details of the country’s foreign exchange saving and revenue generation for the national exchequer, Paracha further said that with the instant supply of only 50MMCFD of stranded indigenous natural gas to CNG stations for use in motor vehicles can save approximately $434.49 million/annum, while it can save two percent Unaccounted for Gas (UfG) which is equivalent to five MMCFD worth $52.84 million annually.

Similarly, the supply/sale of an additional 10 MMCFD stranded natural gas to the CNG Stations for new conversions and its use in motor vehicles can save $86.89 million/annum.

Furthermore, the installation of sequential injection kits in motor vehicles will save 17.54 million litres of petrol and as a result foreign exchange of $13.03 million/annum can be saved.

About revenue generation for the government with allocation of 50MMCFD of local unused natural gas, Paracha said tax collection at the time of distribution/sale to third party (CNG industry) can generate $48.9 million/annum while tax collection at retail price of CNG (supplied by CNG stations to motor vehicles) can generate $102.366 million/annum and tax collection on five MMCFD of natural gas which can be saved through two percent cut in the UfG by supplying the natural gas to CNG stations for re-sale to motor vehicles can generate $10.24 million/annum.

Similarly, $9.7 million per annum tax collection at the stage of distribution/sale to third party (CNG stations) and $20.47 million annually can be generated through the allocation of 10MMCFD of local unutilised natural gas which will be saved through sequential injection kits on motor vehicles, said Paracha.

“The government must immediately take policy decision regarding the supply of only 50MMCFD of unused local natural gas to the CNG Stations in order to save the precious foreign exchange reserves and to generate revenue through tax, duty, royalty, windfall levy of gas (WLG) etc while also to save the skin of already burdened public from the mounting oil prices in the global oil market, which is causing colossal additional burden on public after every 15 days,” Paracha said.

It is pertinent to mention that total 2,300 CNG stations are established in the country and out of which, 1,100 CNG stations are located in Punjab, 600 CNG stations are situated in Sindh, 575 CNG stations are operating in Khyber-Pakhtunkhwa, and 25 CNG Stations have been established in Balochistan province.

At present, approximately 50pc of the total CNG Stations of Punjab have suspended their operation due to the non-availability of gas since December 2021.

Similarly, Rs150 billion worth local investment so far made in developing the CNG kits has been facing serious danger due to the closure of CNG stations and non-availability of gas as a fuel for motor vehicles.

Furthermore, direct and indirect employment in the CNG sector is 0.51 million and total gas consumption required by the entire CNG sector is 400 Million Cubic Feet per Day.

Copyright Business Recorder, 2022

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