Make CNG great again, association leader advises govt

A senior leader of the CNG association promises hundreds of millions in foreign exchange savings if the sector is given stranded local gas supplies

ISLAMABAD: Pakistan’s Compressed Natural Gas (CNG) association believes that it has the solution to the government’s biggest problem – reducing foreign currency payments abroad necessary for fuel imports at a time the country’s exchange reserves are falling sharply and barely cover a month’s imports.

The instant supply of 50 million cubic feet per day (mmcfd) of local “unutilised” natural gas to the CNG Stations for its sale as fuel for motor vehicles can benefit the country to the tune of approximately $778.93 million annually to the country, a leader of the CNG association, Ghiyas Abdullah Paracha, claims.

According to his calculations, the provision of 50 mmcfd local gas will result in the saving of approximately $587.26 million per annum in the form of replacing imported fuels, and the government can generate approximately $191.87 million per annum in revenues as well.

“While having 25 years’ long experience in the gas sector, I can ensure $200 million worth of benefit to the country within one month with available resources if an opportunity is given to me,” said Paracha, adding that he is ready to prove his claim on any forum.

He called on the government to give the CNG dealers the necessary support to make this happen, and said he had submitted the calculations to authorities for consideration.  

Local gas reserves in Pakistan have fallen sharply over the years, with supplies from existing fields dwindling and no new reserves having been discovered of note. CNG, once prevalent as a fuel across Pakistan, has been pushed to the margins again as supply of the local gas has been curbed in the face of falling reserves.

But Paracha believes that the answer lies in turning to CNG again.  

Sharing details of his calculations, Paracha said approximately $434.49 million per annum can be saved in fuel consumption, while saving can also be made on the persistent problem of Unaccounted for Gas (UfG) worth $52.84 million annually. Similarly, he said, the supply of an additional 10 mmcfd to CNG Stations for new conversions can save $86.89 million per annum Furthermore, installation of sequential injection kits in motor vehicles will save 17.54 million liters of petrol and as a result foreign exchange of $13.03 million per annum.

On the revenue generation side, Paracha said that, among other things, tax collection at the time of distribution and sale to third party (CNG industry) can generate $48.9 million per year while tax collection at retail level can generate $102.3 million per annum.

He pointed out that CNG infrastructure was already set up across the country, and it would also be cheaper and more eco-friendly fuel, which will also benefit the masses in terms of price relief. 

A total 2,300 CNG stations are established in the country and out of which 1,100 are in Punjab, 600 in Sindh, 575 in Khyber Pakhtunkhwa and 25 in Balochistan. Currently, approximately half of the stations in Punjab have suspended operations due to non-availability of gas since December 2021. About Rs 150 billion has been invested in CNG kits, and the direct and indirect employment in the CNG sector stands at over 500,000. The total gas supply needed by the entire CNG sector is 400 mmcfd.

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Ahmad Ahmadani
Ahmad Ahmadani
The author is a an investigative journalist at Profit. He can be reached at [email protected]

6 COMMENTS

  1. As the country is begging to Saudi Arabia for USD 4+bln from Saudi Arabia, another association ie CNG association is looking to milk profit form the situation. Over the years the Pakistani decision makers have been criminally negligent in making the right strategy for use of gas reserves in Pakistan. Supplying subsidized gas to homes and CNG stations, instead of prioritizing power stations and export oriented industry, has created the mess we are in today. Gas is a precious resources and should have used to lower power costs for both industrial as well as residential consumers instead of wasting in cars and in people’s kitchens.

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