Loss of workers' jobs, billions of rupees¡nvestmer)t at stake Cortsumers want lowCNG price Industry people also smellconspiracy to promote LNG Perhaps thePeoples' government excel with othersuccessive governments in terms of itsfailures to curb highest ever food inflation,deteriorating law and order, target killing,shortage and load shedding of gas andpower, insecurity, bomb blasts, kidnappingfor ransom, extortion etc.There are hardly any consumer friendlysteps that have ever been taken in thelast three and half years. No serious stepshave ever been taken to resolve the issueshurting the industry and consumers andas a result the burning issues continue tobecame more alarming for the people.Consumers now brace up for another hotissue of load shedding in compressednatural gas (CNG) and it is likely tobecame more nerve wrecking for vehicleowners due to its upcoming high pricesand also for the stakeholders who areseeing their billions of rupees investmentat stake.

Industry people say that the governmenthas been trying hard to bring the CNGrates at par with the petrol and dieselaimed at either destroying this sector tamake a ground for increasing impartaf liquefied natural gas (LNG) orpocketing more revenue from thethriving business af CNG by putting upmare pressure on the existingstakeholders.The Ministry of Petroleum is determinedto bridge the widening demand andsupply gap on a fast track basis throughLNG import.The government had exempted CNGbuses from the GST in 2008 and inbudget 2011-2012 the GST has againbeen imposed thus making heavyvehicles unaffordabie.

it is also amazing to see ban on new CNGlicences but at the same time issuance ofnew gas connections by Sui Northern GasPipelines Limited far CNG stations arecommonly seen. The government shouldlook into this matterChairman CNG Dealers Association AbdulSami Khan says that now the menace oftotal disaster of CNG industry is hangingover heads as very influential industrialistand importers have started campaign tobring CNG price at par with petroleumproducts to bring CNG industry to a haltand they may get full benefit of gas usefor their own use only.In case it happens then the billions ofrupee investment made by stakeholdersand even general public in their vehicleswill go in drain.

The dire need afCNG can be gauged fromthe fact that many public transports(especially mini buses and coaches) havemade changes in their fuel transmissionsystem and started running their vehicleson CNG to make huge saving. Almost allthe four stroke three wheeler rickshawsare also running on cheap fuel.However, the provincial authorities haveyet to wake up as passengers are stillpaying high tariff as per increase in diesei

prices to reach their desired places inMazda Wagons.The government should announce aseparate fair for public traveling in CNGwagons.Instead of pondering over the issue andmaking a joint strategy to cope with thegovernment's aim to destroy the CNGsector, CNG bodies and associationsoperating in various cities sometimescome at loggerheads in taking up mileagein the matter of gas load shedding to dealwith the higher ups of petroleum ministry.

This lack of unity proves highly suitablefor the government who is working onthe phrase (divide and rule) and ultimatelyconsumers will suffer.As a result. All Pakistan CNG Association,operated by Ghayas Paracha and JunaidIsmail Makda, CNG Dealers Associationbeing run by Abdul Sami Khan and CNGStation Owners Association headed byMalik Khuda Bux on many occasions tryto resolve the CNG issues on their ownand sometimes differ on policy matterswith each other.For example, the All Pakistan CNGAssociation (APCNGA) has created a stirin the market by recently claiming that

16 ECONOMIC REVIEW July-August 2011

the proposed decision of around 70 percent hike in CNG price has been revokedby the Ministry of Petroleum and NaturalResources.Chairman APCNGA and Vice PresidentKarachi Chamber of Commerce andIndustry (KCCI), Junaid Esmail Makda saidthe Association's delegation had metPetroleum and Natural Resources MinisterDrAsim IHussain v^here another decisionwas made to keep price differencebetween petrol and CNG at the parity of60:40.Junaid said it was further resolved thatthe gas load shedding in Northern Regionwill be held for two days and partialshutdown will be observed on the thirdday while in Southern Region loadshedding will be observed for one dayfollowed by partial shutdown on thesecond day.At same time CNG Station OwnersAssociation (CSOA) and CNG DealersAssociation (CDA) had threatened to moveto the Court against the governmentdecision for weekly closure of CNG stationsand increase CNG prices.Here Malik Khuda Baksh andAbdus SamiKhan, in a joint hurriedly called pressconference, said that some CNG stationowners had already obtained stay fromSindh High Court (SHC) against the closureof CNG stations. They said that thegovernment cannot increase CNG pricesas it had already ensured under a pricingformula to maintain a 50 percentdifference between the prices of petroland CNG agreed between CNGassociations and Government of Pakistan.Similarly, the government cannot suspendsupply of gas to CNG filling stations inSindh as the SHC had barred Sui SouthernGas Company from doing so.The environment friendly CNG fuel wassubstituting petrol import of $4.5 billionannually for the economy, by using onlyseven per cent of the total gasconsumption in the country.The closure of CNG stations will virtuallykill CNG industry as 2.5 million vehicleshave been converted to CNG in thecountry. They pointed out that Rs 235billion have been invested in CNG sectorwhich is directly or indirectly providingemployment to 500,000 people in thecountry.Lamenting vested interests including oilmarketing companies (OMCs), they saidthat they were lobbying against CNGsector. "But we will fight against thesevested interests till our success", theyvowed.

Gas shortage was caused by gas utilitiesand due to their mismanagement. Theywere also not going for large abandonedgas fields and also those under litigation,they noted.They alleged the government had grantedlicenses to 350 CNG filling stations lastyear despite a ban on new licenses.They said they could not understand asto why the government is trying todiscourage the CNG sector when thecountry is already importing petrol athigher rates. "How the government wouldmanage the petrol availability whenpeople will shift towards it after removingthe price difference, " they added.While the APCNGA was threatening to goon strike, the SSGC management calledupon the leading CNG associations ofPakistan on July 6, 2011. It had beenagreed that due to the Annual-Turn-Around (ATA) of OMV Pakistan-operatedKadanwari Gas Field, CNG stations willbe closed from 9.00 am on Monday July11, 2011 till midnight of Tuesday July 12,2011.SSGC was represented at the meeting,held at its Head office, by SSGC's ZuhairSiddiqui, DMD (Corporate Services), SalimA. Mughal, SGM (Distribution-South) andShoaib Warsi, SGM (Distribution-North).Head of leading CNG Associations of thecountry including Abdul Sami Khan,Chairman, CNG Dealers Association,Junaid Esmail Makda, Central Chairman,All-Pakistan CNG Association and MalikKhuda Baksh, Chairman of CNG StationOwners Association participated in themeeting called by SSGC to take thestakeholders into confidence over the 2-day closure.Kadanwari Field, which supplies 200mmcfd of natural gas to SSGC, will beundergoing annual operationalmaintenance from 8th to 23rd July, 2011,directly reducing the Company's capacityto serve its customers in meeting theirnormal gas requirements. In view of thisextraordinary situation, SSGC has takenseveral steps to maintain normal suppliesto its customers including requesting theCNG stations to observe closure for 2 days.In addition, SSGC has also requested theindustrial sector to use the natural gaswith purpose by voluntarily curtailing theirgas consumption by 10 per cent duringthe above mentioned period.Now the APCNGA chairman GhayasParacha on July 8 had announced to startcountry wide protests from July 13 afterthe arrival of Petroleum Minister DrAsimHussain on July 10.

The protest campaign will be launchedfrom July 13 from Punjab which alsoincluded rallies. The government shouldstop gas load shedding and provide CNGat 40 per cent less price than petrol to theconsumers, he said. He termed the gasload shedding in summer as unjustifiedand it aimed at creating problems forconsumers besides causing huge lossesto the people as well as stakeholders.There is o dire need that all the industrypeople should unite under o one platformto save CNG industry from government'snefarious designs otherwise both industryOS well as consumers will suffer heavily.SSGC has already received tremendousinterest from local and internationalplayers in response to its recent invitationfor the import of Liquefied Natural Gas(LNG) under Third Party Access, havingreceived 17 'Expressions of Interest' (Eols)for the allocation of capacity under itstransmission system from leodingcompanies interested in developing theirown LNG Floating Storage and Re-gasification Unit (FSRU), arrange theirown supply of LNG and having their ownbuyers of re-gasified LNG (RLNG).The 17 Companies which submitted theirEols are Shell Gas and PowerDevelopments B.V, 4Gas Asia, GranadaGroup of Companies, NatGas, BW FleetManagement AS, MTMKN Group, GlobalEnergy Infrastructure Limited, PakistanGasport Limited, Kot Addu PowerCompany Limited, PK Energy, Vitol, EngroCorp Limited, SAF International, LNGEnergy Limited, Iran Liquefied GasCompany, Trading Enterprises (Pvt.)Limited and Xpro Energy Limited.The primary objective behind inviting theEols through a print advertisementpublished on May 24, 2011, was toascertain the number of parties interestedin setting up LNG terminals and their stateof preparedness so that SSGC canaccordingly plan to modify and augmentits system to help provide entry and exitpoints to the LNG terminal operators aswell as the intended volume they cantransport through the Company's system.The advertisement was the first logicalstep in encouraging interested parties toexpedite setting up of LNG Terminals sothat the imported gas is made availableat the earliest in order to meet thegrowing shortage of gas to Pakistan'sindustrial and commercial customers.

ECONOMIC RE\/\i\N July-August 2011 17

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