OGRA, CNG station owners agree on new pricing formula

The pricing mechanism of the Compressed Natural Gas (CNG) has been agreed upon between the Oil and Gas Regulatory Authority (OGRA) and the CNG stations owners.

According to the media reports, the price of the fuel gas has been fixed at 72.20 per kilogram for the region-1 and Rs.63.76/kg for the region-2.  It should be mentioned here that region-1 include Khyber Pakhtunkhwa, Balochistan and Potohar areas; while, region-2 includes Sindh and Punjab except Potohar areas.

Reports confirmed that OGRA has developed this formula which is now awaiting nod of the federal government. It will then go to the judiciary to get finalized and implemented in letter and spirit. The view of CNG station owners or its association has not yet come but the new method reportedly has their consent, reports added.

While the gas price has been reduced a bit, rupees seven per kg will be paid to CNG stations under the head of ‘operating costs’. Other details of the agreement have yet to come.

CNG Association Chairman Abid Hayat while speaking to the media said that OGRA had informed the association yesterday that they would be sent a copy of the devised pricing formula within two days for consultation, but the association has not received a copy as yet.

OGRA officials said that after completing the hearing, the entire proposal has been forwarded to the petroleum ministry for finalising the formula after rationalising taxes in consultation with the Federal Board of Revenue (FBR).

OGRA officials said the proposal includes a suggestion for rationalizing and not ending production costs in the price. Hayat was of the opinion that t the association had given three proposals to OGRA and expect one of them to be adopted.

He said that the parameters defined by the association were after rationalizing all aspects of pricing and would accept the given formula even if it left them with a no profit/ no loss situation. But, he said that if OGRA’s formula left them in loss, they would not accept the proposal.

The station owners have shut down their operations, giving rise to long queues at filling stations and crippling the movement of vehicular traffic. Station owners claim that they have to bear loss of 23 rupees, 60paisa on each kg of filling of the gas.

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Posted by Web Desk on Nov 29 2012. Filed under Latest News, National, Pakistan. You can follow any responses to this entry through the RSS 2.0. You can skip to the end and leave a response. Pinging is currently not allowed.