More energy shocks in store as shortages fire up CNG prices

With winter outlook growing gloomier and gloomier for the natural gas consumers amid high prices and low supply, transporters are also seeing long bumpy roads ahead even in the months of autumn.

This is what the rising trend in the prices of Compressed Natural Gas (CNG) in the last month is something to go by regarding upcoming chilly, dark, and motionless nights of winter months. Since September 02, 2021, the average price of CNG has been increased by Rs19 per liter or about 18 percent to Rs127.27 per liter in Punjab. Similar alarming trend is being witnessed in Sindh province where average CNG price jumped by Rs32.50/kg or 22 percent to Rs179.15/kg.

This sharp increase in CNG price has been calculated with another upward revision announced on Saturday. Consequently, all CNG filling stations in Punjab and Sindh running on imported RLNG have to brave an increase of Rs15/kg in Sindh province and Rs8/litre in Punjab province.

With latest revision of prices, during the period of September 02, 2021 to October 02, 2021, CNG price in Islamabad jumped to Rs128.22/liter from Rs108.34. In Rawalpindi, it increased to Rs128.55/litre from Rs108.14, Gujranwala Rs127.99/litre from Rs108.50, Sialkot Rs120.99/litre from 105.95, Lahore Rs129.30/litre from Rs107.50, Faisalabad Rs126.88/litre from Rs108.00, Sargodha Rs125.99/litre from Rs111.90, Multan Rs128.23/litre from Rs107.60, and in Bahawalpur the CNG price was hiked to Rs129.30/litre from last month’s Rs108.00.

In Sindh province, the price of CNG increased to Rs180.00/kg from Rs155.00/kg in provincial capital Karachi during September 02, 2021 to October 02, 2021 period. Similarly, price of CNG in Hyderabad jumped to Rs 180.00/kg from Rs 145.00, Sukkur Rs180.00/kg from Rs145.00, and Larkana Rs176.60/kg from Rs141.59 during the same period. However, price of CNG remained stagnant in Khyber Pakhtunkhwa and Balochistan provinces.

According to an energy industry official, shrinking inventories on the back of low supplies and high demand has badly hampered energy market in almost entire world.

“The high prices seen in summer months are feared to be further multiplied in winter months when seasonal push for its demand may wreak havoc on consumers. The global natural gas prices are rising unabatedly with no respite in sight. In the post-Covid-19 opening of economies, natural gas prices are breaking records in the Europe, United States and Asia,” he observed.

He regretted that Pakistan was facing a much precarious situation due to its greater reliance on imports of Liquified Natural Gas (LNG) to bridge demand-supply gap. “Presently, about forty to fifty percent demand is being met through imports. Not only this the capacity of import infrastructure could not be increased as per demand, which would exacerbate the situation,” the industry official said.

Ghiyas Paracha, chief of All Pakistan CNG Association (APCNGA), lamented the prices of CNG in Punjab and Sindh running on imported RLNG went up immediately, making this alternative fuel further costlier.

“The increase in CNG prices is mainly a result of high rate of sales tax and expensive purchasing of spot LNG, while another contributing factor is appreciation of dollar against rupee.”

Paracha urged the government to arrest this alarming trend that was bound to hurt CNG sector as well as commuters alike.

“We demand of the government to reduce sales tax on LNG imports immediately like petrol and LPG with a view to make CNG, which is fuel of the poor affordable for them,’ he added.

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