Govt likely to deregulate CNG sector

The government is likely to deregulate the CNG sector and its consumer pricing, free from the Oil and Gas Regulatory Authority’s (Ogra) regulation, it is learnt here Monday.
An official source told The Nation that the government has moved a summary in this regard seeking views of the OGRA and Planning Commission on this count.
The move ,to take away the CNG sector from Ogra’s regulation, which according to some experts is going to hurt the consumers in long run and leave them at the mercy of CNG owners. Besides, the absence of regulation will bring a lot of litigation in future, the expert maintained.
The OGRA in its comments has asked the government to clarify, the ambiguity, whether it wants to deregulate only RLNG or the complete CNG sector, the official said. In OGRA view no sector can be partially regulated or deregulated, there can be either total regulation or total deregulation, the official added.
However, the source in the ministry of Petroleum and Natural Resources claimed that the government wants to deregulate the complete CNG sector and also its consumer pricing.
One of the reasons according to the official is the government failure to complete the quorum of OGRA which is adversely affecting the CNG sector and its consumer pricing.
It is pertinent to mention here that currently OGRA is working without member oil and full time member finance. The Ogra law specifies that the presence of Chairman (with the acting chairman not empowered to take key decisions) as well as two members is a prerequisite for completing the quorum required to enable them to take key decisions that have repercussions on the country’s oil and gas sectors.
When contacted about the deregulation of the CNG sector and its consumers prices, the central leader of All Pakistan CNG Association (APCNGA) Ghiyas Abdullah Paracha told that in the beginning the CNG sector was deregulated but was later brought under the OGRA regulation.
In Punjab the CNG stations have already been deregulated, he claimed adding now its time to deregulate CNG sector of Balochistan, Khyber Pakhtunkhwa and Sindh.
He said that it is OGRA quorum which is the main reason behind the decision of the CNG sector deregulation.
He said that dysfunctional OGRA is causing loses to the CNG sector and the consumers are also being suffered, adding that it is therefore necessary to deregulate the sector to protect the sector from collapse. Ogra had not reviewed CNG prices for the last three years resultantly the sector is being operated under old pricing, Paracha stated. 
The matter of Gas Infrastructure Development Cess (GIDC) is still pending while on the other hand the government is demanding same from the CNG stations, he informed.
Similarly electricity prices were downwards and upwards revised several times by Nepra but in both cases, due to the absence of the regulator decision, didn’t transfer the benefits or burden to the consumers as it is not authorised to do so without the approval of the Ogra. Since Ogra quorum is not complete it cannot give any decision on the issue. 
Furthermore in absence of any decision from OGRA, the CNG failed to transfer the benefits of the decrease of taxes on gas to its consumers, Paracha maintained.
The deregulation will bring more competition to the sector and every gas station will be free to decide its own profit margin, Paracha explained adding that it will result in the reduction of CNG prices as everyone will try to attract more customers by keeping its prices low. 
In Pakistan, some 3,500 CNG stations are supplying fuel to about 4 million vehicles.

https://nation.com.pk/business/21-Jul-2015/govt-likely-to-deregulate-cng-sector