KARACHI: “My car runs on CNG and I get the cylinder filled three times every week. That costs around PKR 1,000, but now this won’t be possible,” Tanvir Ahmed, a 40-year-old researcher and writer, told Arab News, referring to this week’s decision by the government to raise the price of Compressed Natural Gas (CNG), creating a difficult situation for those using it as fuel for transportation.
At a local CNG station in the port city of Karachi, people are waiting for their turn to fill their vehicles, and there are clear signs of anxiety on many faces.
“I have a fixed monthly income of around PKR 60,000 and five dependents,” said Ahmed, who is father to three children. “This extraordinary jump in the prices is going to cost me additional PKR 1,500 per month.”
Following the tariff hike, the CNG rate went up by PKR 22 per kg.
“We have decided to pass on the price hike to consumers, instead of resorting to a shutter-down strike or launching a protest campaign against the government’s decision. We will pursue the case through peaceful means,” Malik Khuda Bakhsh, chairman of the CNG Station Owners’ Association, told Arab News on Sunday.
CNG was first introduced in Pakistan as a “poor man’s fuel” that was also environmentally friendly. The country has since become one of the world’s leading CNG users with nearly 3,500 stations licensed to sell the product.
“CNG attracted around PKR 44 billion in investment. This includes PKR 16 billion that was spent by the transportation sector to switch vehicles from costly petrol and diesel to CNG,” Bakhsh claimed.
At present, the price of petrol is PKR 93 per liter while CNG is sold at somewhere between PKR 99 to PKR 104 per kg. “Gas prices have surpassed the price of petrol,” Bakhsh said. “Who will buy CNG now when they can use petrol or diesel?”
He added that the decision would impact 650 CNG stations across the province of Sindh alone.
Some drivers are complaining they cannot run their vehicles on petrol as they took out their fuel kits and tanks when they installed their CNG kit, supposedly for greater fuel economy.
“I will not be able to switch to petrol because my rickshaw only gives me the CNG option,” one driver, Muhammad Sabir, said.
The president of Karachi Transport Ittehad, Irshad Bukhari, told Arab News that his organization has decided to lobby the federal and provincial administrations to give a viable solution to this problem.
“If there is no breakthrough in our negotiations, we will be forced to remove 8,000 buses from the roads. After all, 90 percent of them are fueled by CNG,” Bukhari warned.
The government’s decision to raise gas tariffs is expected to reduce the revenue shortfall of two gas companies from PKR 152 billion to PKR 58 billion, according to a research report from Topline Securities.
The International Monetary Fund (IMF) has already asked the country’s new administration to increase gas and electricity rates. Pakistan is likely to approach the IMF for a bailout deal to steer the country out of its balance-of-payment crisis. However, economic experts believe the IMF package will come with stringent conditions and may entail substantial political cost.
Tanvir Ahmed said: “It is not just the cost of running my own vehicle that will increase due to the CNG price hike, I’m anticipating an increase in the fees I pay for my daughter’s school transport too.
“I am contemplating ways to cut down my own expenses. But how will I do it? There is nothing lavish or unnecessary in my life,” he continued. “I only spend when I need to.”
