Who nicked billions out of CNG consumers of Pakistan?

July 3rd, 2008 by Kashif Aziz ( 530 Views )

While the media, and opposition has downplayed it, somebody in/with the government has made billions in 48 hours. On July 1, 2008, it was announced by Makhdoom Shah Mehmood Qureshi, Minister of Foreign Affairs and caretaker Minister of Petroleum, that CNG prices are increased by 31%. All media channels termed this as an increase of Rs. 14 per Kg in CNG price, raising it to Rs. 54 per Kg. Eventually, the price came into effect and CNG stations started selling on that price. However, due to severe consumer backlash, CNG stations and their associations protested against this raise and decided to close pumping stations if the issue is not sorted out.

This brought the government out of sleep and a clarification was issued stating that the prices are increased by Rs. 4.3 per Kg (excluding taxes), not Rs. 13 per Kg. This made the price to be approximately Rs. 44 per Kg. However, many CNG stations kept selling at Rs. 54.

Later on, there were negotiations between the government and associations of Petroleum and CNG Dealers. Now, the final rate of CNG has been fixed at Rs. 47.25 per kg.

Chairman of the Association Abdul Sami Khan, justified the rise of Rs. 9 per KG as:

Rs. 5.58 is the raise in the price of CNG while Rs. 3.42 is for the additional cost being born by the CNG stations due to the rising prices of diesel, electricity, etc.

Moreover, All Pakistan CNG Dealers Association has decided to sell the gas at the previous rate of Rs. 38.80 per kg for the next two days to compensate the people’s loss.

This incident shows the inefficiency of current government and its instruments. Firstly, as CNG is produced locally, there is no apparent logic to raise the price so much when people are still mourning the elevated costs of petroleum, electricity and food stuff.

Also, Who will be held responsible for this ‘miscalculation’ in CNG price? Will there be any investigation of this issue and the perpetrators be taken to account who have robbed the people of Pakistan in broad daylight.

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This entry was posted on Thursday, July 3rd, 2008 and is filed under Current Affairs .

Tagged with: cng, Pakistan, shah mehmood qureshi

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2 Responses to “Who nicked billions out of CNG consumers of Pakistan?”

1

Nasir Zuberi
July 20th, 2008 16:09 GMT
Dear Mr. Kashif, Assalam o alaykum,

Hope you receive this email in good health. Like majority of the population i am also going through the phases of frustration, anxiety & helplessness. In the following lines i will try my best to remain short & specific.

CNG prices
Recent revision in CNG prices has just created further ambiguity among the consumers. The increase of more than 30% has no logic & relevance with the increase in petrol prices internationally as we do not import natural gas, but its very much our own local product, therefore, there is no justification to increase it with the proportion of increase in petrol price. Coming back to the point, CNG Dealer association has worked out & implemented its own calculation of increase in the price from Rs. 38.25 per kg to Rs. 47.25 per kg. Where as OGRA has been issuing statements that the increase in price is Rs. 5.50 which shall be charged @ 43.75 per kg.

As of July 9, OGRA had failed to establish & implement this price in the market & CNG Dealers are openly charging Rs. 47.25 per kg. This is an open challenge to the Governments Rit, may i ask to some one in the high ups that when agencies are going to ensure that Governments Rit is established?

The authorities took the matter to the Court against PSO, Shell & Caltex being dealers of CNG also, but unfortunately & expected they did not involved the CNG Dealers association directly in this matter. And finally the case got rejected & there has been no change in the price which is Rs. 47.25 per kg.

The other side of the story is that CNG Dealers are still minting money, just consider the following scenario that if there are about 1,000 vehicles running on CNG in the country, what kind of money is going into the pockets of CNG Dealers;

Number of cars on roads: 1,000 (just an assumption for the sake of clarity)
Average daily consumption: 8.25 kg (full capacity after re-fill)
1-Refill cost @ Rs. 38.25: Rs. 315.56 (based on old price)
2-Refill cost @ Rs. 43.75: Rs. 360.93 (based on new rate as suggested by OGRA)
3-Refill cost @ Rs. 47.25: Rs. 389.81 (rate implemented by CNG Dealer Association)
4-Difference of over charge Rs. 28.88 per car per day (lowest assumption)
5-Total over charge on the basis of 1,000 cars VS Rs. 28.88 = 28,880 per day

Note: it is estimated that there are more than 1.2 million vehicles on the streets of the country, and if we just assume that only 10% are running on CNG i.e. 120,000 vehicles, the above estimate of over charging will turn to move than Rs. 34 millions per day!!!

Hope i have been able to clarify my view point. Finally, who & how this price over charge is going to be paid back to thousands of people like my self. Is this not governments responsibility to take immediate action? yes it is, specially when they claim to be achieving outstanding performance in 100 days!

Being a Muslim, i strongly believe that price of this extreme Ignorance is going to paid mainly by the High Ups of the Govenment & for sure by the people who remain motion less & silent on all these happenings. May Allah bless us all & Pakistan with prosperity & good governance, I, like many others have not lost hope yet but unfortunately we are small in number & those who are in power & with authority & responsibility to take decision of public interest are talking negatively about Pakistan’s solidarity are large in number. But, Inshallah things will turn in the right direction if we seek Allah’s help.

Thank you very much for laready taking up the matter.

Jazakallh & Allah Hafiz.

Nasir Zuberi
2

Kashif Aziz
July 20th, 2008 16:40 GMT
Dear Nasir: First of all thanks for sharing your insight. Indeed, every common Pakistani is frustrated with this situation and for now we can only pray and keep steadfast.

In my opinion, prime reason for all this chaos and mayhem is lack of justice. Societies can bear with crimes and corruption but decay is inevitable in absence of justice. Had our courts being active and our judiciary honest, things would have been less depressing.

While not to sound too pessimistic, I will recommend to conserve as much as possible, as there is a recession out there.

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