Owners defend profit margin of gas stations

Karachi: CNG station owners and dealers have held responsible to Ministry of Petroleum and Natural Resources MNPR for creating chaos throughout the country, terming its measures as a conspiracy against them and the masses in order to achieve their own agendas.

In an emergency press conference, Abdul Sami Khan, Chairman CNG Dealers Association said that CNG owners and dealers will fight for the cause of their business and interest of masses till the attainment of their objectives, and will not bow down against the petroleum ministry and authority concerned for manipulation in the retail cost versus operating expense of CNG fillers.

CNG owners and dealers are ready to face ligation as they have appointed a lawyer to fight their case in the Supreme Court in the upcoming hearing of December 05, he said, but they will not accept any backdoor policy of the government to close the entire the industry through legislation in line with their motives.

The deduction of Rs 30 per kg CNG had been presented wrong to the court by ministry and authority concerned despite of the fact the independent government auditors have evaluated the operational cost and presented their findings to the Ogra rationalized accordingly.

CNG dealers could not operate on hefty losses and they are liable to shut their business as far as laws of their business are concerned but they are forced to operate in losses and detained in the jail, Khan added.

We demand a justified profit should be given to us not a windfall because none of the sector can run business while suffering everyday losses, which they have been incurring for last 40 days, CNG body chairman said.

Abid Uzair, executive member of CNG Station Owners Association said the business of CNG is not viable at the present retail cost because the expenses of stations are too high compared with that portrayed in the media.

The profit has been fixed at Rs 4.95 per kg for CNG stations situated in Region 1 and Rs 6.04 per kg for Region 2 after the prices of CNG were quoted to Rs 61.64 per kg and Rs 54.16 per KG to the court by the MNPR.

However, he added, the operating expenses of Ogra’s auditors are Rs 23.06 per kg including compression cost, wages to labourers, expense related to repair and maintenance of machinery and civil works, oil and lubrication, rental of the land and margins charged by Oil Marketing Companies.

Overall the cost calculated of these abovementioned heads translates into Rs 18.11 per and Rs 17.02 per kg by Ogra’s auditors recommendation respectively, Uzaid said. These additional costs are now losses of all CNG dealers and association that they are bearing nowadays on every kg of gas, he added.

Comparing the CNG tariff rates with different sectors, he said the CNG station owners pay Rs 618.55 per mmbtu for natural gas, on the other hand, fertilizer, IPPs and Industrial sectors are provided gas at Rs 116.27 per mmbtu, Rs 460 per mmbtu and Rs 460 per mmbtu, respectively.

The impression about CNG sector are being given subsidy is utterly wrong though this sector generates annually Rs 80 billion revenues to the national exchequer that supports different sectors for having subsidy from the government’s side.

Besides the expenses of CNG owners are relatively higher than all these sectors, executive member said. A cost on CNG is evaluated at Rs 31.09 per kg whereas the production of power by IPPs; urea by fertilizers companies and industrial made up by different companies are Rs 5.84 per kg, Rs 23.12 per kg and Rs 23.12 per kg respectively.

Uzair mentioned that CNG consumption share in overall gas supplies are low among all different sector. It stands at 9.42 percent which normally comes down to 7 percent due to weekly schedule closure, however, the shares of industrial, power and fertilizer sectors constitute 21.78 percent, 27.52 percent and 16.6 percent respectively.

Malik Khuda Bux, Chairman CNG Stations’ Owners Association, said that the government has put the jobs of 0.64 million people at stakes along with investment of Rs 122 million made by dealers and owners.

He said the government should realize that CNG in the vehicles have saved $5.6 billion of the foreign reserves which the natural gas substitutes in the imports bills. Almost 100 million people are benefited from the cheap fuel on daily basis, the government controlled pollution drastically in the environment with CNG industry nonetheless, he added.

He demanded the government to evaluate a rational profit to CNG dealers and owners and remove their issue of double taxation and higher infrastructure cost.