SC orders to retain current CNG prices till next hearing

ISLAMABAD: The Supreme Court (SC) resumed hearing of the case pertaining to the pricing of petroleum and oil products along with the CNG and ordered to retain the current CNG prices until next hearing, Geo News reported Thursday.

A two-member bench of the apex court, comprising Chief Justice Iftikhar Muhammad Chaudhry and Justice Jawwad S Khawaja is hearing the case.

During today’s proceedings, Oil and Gas Regulatory Authority (Ogra) presented the new formula for CNG pricing. The CJ also asked the secretary petroleum to give an explanation over the statement given by Adviser to the PM on Petroleum and Natural Resources Dr Asim Hussain, and remarked that his statement had criticized the court.

Dr Asim had said that the petroleum mafia has kept the matter of petroleum policy in pending on court’s order.

Secretary petroleum told the bench that the case related to petroleum levy is currently being heard in the Lahore High Court. Replying to this, the CJ instructed him to approach the court and request for prompt hearing.

The Chief Justice vowed that the court will not allow any mafia to rule in the country.

The court also accepted All Pakistan CNG Association’s (APCNGA) request to become party in the case. Hafeez Pirzada, who will be representing the association, pleaded the court to give him two weeks time to submit a comprehensive reply in the matter.

Later, the court adjourned the hearing till November 19 and ordered to maintain the current CNG prices till then.

The APCNGA had refused to accept the new pricing formula worked out by the Ogra. According to the association, the owners of CNG stations will have to brave the loss of Rs20 on one kg CNG which is not sustainable anymore. The APCNGA had vowed to challenge the new pricing formula in the court today.

They said if the said formula got approval, the owners of CNG stations would be left with no option but to close down their outlets as under the proposed reduced production cost and profit of CNG stations, it was no more sustainable to run the stations.

According to the new formula, the CNG price will go up by Rs4.81 per kg and the production cost and profit margin of CNG stations will be slashed by Rs15 per kg.

However, the 11 officials involved in the process of finalising the new formula are tight-lipped and they were under oath not to divulge the formula to anyone prior to submitting it to the Supreme Court. It was also learnt that Adviser to the PM on Petroleum and Natural Resources Dr Asim Hussain and Secretary Dr Waqar Masud remained in contact with Ogra’s top mandarins.

The SC had asked Ogra to work out the new pricing formula independently but the top men of the ministry were reportedly found in contact with officials of the regulatory body. The Ogra had accorded, the official said, approval to the new pricing formula of CNG in the light of the Supreme Court’s order. The regulator has approved the raise in the CNG price by Rs4.81 per kg in Region-1 (Potohar, KP and Balochistan) and Rs3.85 per kg in Region-2 (Punjab and Sindh). The Orga has changed the name of operating cost as production cost.

“The regulator has reduced the production cost to Rs5.75 from Rs20.80 per kg and slashed the profit margin of the CNG stations to Rs5.28 from Rs11.80 per kg,” the official said. The new pricing formula will be tabled before the Supreme Court and if it is accorded approval, Ogra will issue the notification about the new CNG price. After the approval by the apex court, the new CNG price will be Rs66.45 per kg in the Region-1 and Rs58.01 per kg in Region-2.