The All Pakistan CNG Association said compressed natural gas (CNG) is still 30 percent cheaper than petrol despite the recent cut in petrol price.

The prices of petrol and CNG could be compared only when the fossil fuel is available at Rs49 per litre, the APCNGA chief said. Petrol is sold in litres while CNG is sold in kilogrammes therefore the prices cannot be made, said Ghiyas Abdullah Paracha. He added that the mileage of CNG is far better than petrol as one kilogramme CNG is equal to almost 1.5 litres of petrol.

He said that both the fuels should be sold in litres to make things easier for all the stakeholders. He said that international and national oil prices are declining therefore the price of natural gas for CNG sector should also be reduced and CNG outlets in Punjab should be reopened to provide relief for masses. He said his organisation had a formula for the reduction of CNG prices.

Paracha said that the average price of CNG in the country is Rs73.78 per kg which is almost 30 percent less than petrol. He said the CNG sector is paying Rs300 per mmbtu as GIDC which must be resolved. He said that the issues of operational cost of CNG owners should be resolved immediately.

He said that Rs450 billion had been invested in the sector which is providing jobs to millions of people.

Meanwhile, Federal Minister for Petroleum and Natural Resources Shahid Khaqan Abbasi said CNG is important part of the country’s energy sector and it would be promoted. “We will not allow any crisis to damage the world number one industry and efforts were underway to revive it,” he said.

The minister said that the government had taken provision of environment-friendly and economical fuel to the masses as a challenge, adding that import of LNG will begin from March after which no CNG station would face closure. He said that the price of CNG would be deregulated, it would be linked to crude oil and its price would be 30 percent cheaper as compare to the petrol.

The move will have a positive impact on budget of masses, environment, oil import bill and job market, he added. He said that revival of CNG would help establish an alternative fuel system which will not be affected by petrol scarcity or vitality of market hence providing relief to masses.

The minister lauded the CNG sector for taking initiative to import LNG to overcome crisis ensuring that government is fully cooperating in this regard. After arrival of LNG the annual demand of petrol in Punjab would be reduced by almost two billion litres per annum, he said.

“We have offered fiscal incentives for import of LNG so that the once vibrant sector can again boom,” he said. He asked other industrial groups to follow the footsteps of CNG sector to settle their energy problems offering all out support.

Meanwhile, the Pakistan Economy Watch said oil price slide up to unprecedented sixty percent and concerns regarding future prices has started hurting international LNG market.

The fall in the LNG prices have added to the problems of investors resulting in stall or delayed projects while narrowing price gas has pushed the US out of the thriving Asian market, said Dr Murtaza Mughal, the PEW president. Several high-cost gas projects launched by oil and gas giants have hindered or be altered due to weakening prices, he added.

He said that the international supply of LNG has been projected to be boosted by 60 million tonnes but demand will be modest due to slowdown in some important economies and resumption of nuclear reactors operations in Japan and South Korea after 2011 incident.