Analyst’s backs government plans to dampen CNG consumption in private cars

Analyst’s backs government plans to dampen CNG consumption in private cars

Dr Asim Hussain, Minister Petroleum and Natural Resources, wants the cabinet to devise steps that will dampen the use of compressed natural gas (CNG) in private cars so that the same resource can be utilized in other sectors, which
are in dire need of it.

Hussain was of the view that CNG consumption in private cars should be discouraged while in its place public transport vehicles should be given a green signal.

Analyst’s seem to accord with government in this regard. They consider it as a right decision as there are other critically important areas that are more desperate for the commodity.    

Faisal Shaji, Standard Capital Securities Research Head, held that government’s policy was flawed when they allowed rapid growth of CNG consumption. As per Shaji, the proliferating of CNG consumption had more cons than pros.   

Shaji divulged that CNG station owners were awarded licences on regular basis through political manoeuvres and now Pakistan is facing shortage of gas, while the upper middle class is reaping the benefit of this cheap fuel.

Shaji said, “The country could not find any alternative to Sui gas fields. With low investments in oil and gas sector, we need to change our energy mix and save gas, which is now a scarce commodity.”

Transporters in most cities have converted their vehicles to CNG but despite availing cheaper fuel they are charging same fares thus the poor who use local transport are not gaining from this.

Atif Zafar, JS Global Capital auto sector analyst, said, “ The government is right in planning to facilitate public transport vehicles because the poor, who travel through buses and wagons, are the ones who deserve the cheaper
fuel the most.”

Atif Zafar believes liquefied petroleum gas (LPG) can be used as an alternative to CNG, it can help sharing the burden. LPG will cost more than CNG but it will still be far cheaper than petrol/diesel.

The analyst said, “The government will have to give some incentive to private car owners to switch to LPG.”

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Posted by Wajahat Javed on Nov 19 2011. Filed under Business, Pakistan. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry