300 CNG stations facing closure

Posted on July 27, 2012. Filed under: Energy crisis, Natural Gas, Pakistan |

ISLAMABAD, July 25: In a bid to put a cap on once robust CNG industry the government has refused to renew the licence of nearly 300 CNG stations, paving way for the closure of all CNG outlets in three years` time.

The Ministry of Petroleum in a written directive, available with Dawn, has stopped Ogra from granting extension/renewal in CNG licences of operational stations on their expiry. CNG licences were granted for the period of 15 years with provision of a five-year extension. The government, however, has decided not to grant any extension to manage the shortfall of gas.

Adviser to Prime Minister on Petroleum and Natural Resources Dr Asim Hussain on July 13 told Senate that due to continuous gas crisis, the CNG stations would be closed down in phased manner.

Well-placed sources aware of the development told Dawn that with this direction of the ministry around 290 CNG stations would be closed down shortly after completing 15 years duration in accordance with Ogra licence.

They said many licenseeshas approached Ogra for grant of renewal in their CNG licences, however, their cases have now been held up by Ogra, adding, `currently 3,337 CNG stations are functioning` They said the ministry of petroleum had now started materialising its three years long policy by putting a ban on CNG business. The adviser verbally directed Ogra not to grant five years renewal/ extension in the existing CNG marketing licences on their expiry date under Rule 7 (2) of Pakistan CNG (Production & Marketing) Rules, 1992 and further advised Director General (Gas) of the MP & NR to issue policy guidelines/ instructions in the matter to Ogra.

The CNG industry was set up in 1997 in Pakistan. It saw a massive boom due to high petroleum prices during the past decade and 3.5 million commercial and private vehicles were converted to CNG.

But Pakistan started experiencing gas shortfall in 2007 which worsened in the following years forcing government to put an end to CNG industry which is estimated to be valuing more than Rs15 trillion.

Dawn.com

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