KARACHI - The Sindh High Court (SHC) on Tuesday sought arguments from the Ministry of Energy (Petroleum Division), the Oil & Gas Regulatory Authority (Ogra) and others over increasing the price of natural gas for the compressed natural gas (CNG), till December 6.

A division bench headed by Justice Muhammad Ali Mazhar conducted hearing on a petitioned filed by the Sindh Petroleum and the CNG Dealers Association challenging a notification issued by Ogra regarding increasing the price of the CNG.

Counseling on behalf of the petitioner, Barrister Mohsin Shewani and Amin Banduquda submitted that the notification issued by Ogra was illegal they pleaded the court to restrain the federal government from determining the CNG price.

They argued that the CNG price crossed petrol price for the first time in country’s history, which proved devastative for both stakeholders and consumers, they contended that the consumers are not able to afford the CNG price.

“Ogra had given its proposal to increase Sui Southern Gas Company’s (SSGC) price by 17 percent, but the federal government had refused the proposal and increased the sale price of CNG sector by 40 per cent” said the lawyers. Adding that the government is not authorized to bring any changes in the prices if determine by the Ogra.    

The court after hearing their arguments directed the Petroleum Division, Ogra, the SSGC and other respondents to submit their comments in the next hearing fixed on December 6.

In his previous arguments, Mohsin Shahwani said the business of the CNG sector is on the verge of shutting down due to the impact of the exorbitant 40 per cent increase in the sale price from Rs700 to Rs980. He added that the retail price for the consumer has been increased by Rs22, reaching Rs105 per kilogramme, while the price of petrol is still Rs93 a litre, and this situation can adversely affect the business of the petitioners as well as the public, who are CNG consumers.

The counsel said the impugned notification and the advice of the federal government is, on the face of it, not only beyond the legal authority of Section 8 of the Ogra Ordinance and tariff rules but also in violation of articles 4, 18 and 37 of the country’s constitution.

He said that earlier, similar notifications for increasing the price of CNG sector had been challenged on similar grounds and they had been struck down by the superior court as ultra vires to (beyond the authority of) the Ogra Ordinance 2002.

He added that the impugned notification has been issued on the misconception that it would help the declining economy, but the CNG industry is already contributing by paying exorbitant taxes amounting to billions of rupees to the national exchequer.

He said the CNG sector depends on the local natural gas and has no nexus with the international market, so natural gas cannot be brought on a par with petrol and other petroleum products.

He requested the court to declare the impugned notification increasing the CNG price as illegal and ultra vires to the Ogra Ordinance, as well as to restrain the SSGC and others from receiving bills on the basis of the impugned notification.