CNG pricing mechanism unlawful: SC.

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ISLAMABAD: Pakistan’s Oil and Gas Regulation Authority (Ogra) on Thursday ordered reduction in the price of CNG by Rs 30.90, issuing a notification in this regard following directions by the Supreme Court, DawnNews reported.
Meanwhile, the CNG association has rejected the price reduction, writing a letter to the regulatory body in protest of the reduction. Sources privy to the matter told DawnNews that the association was considering a strike from Friday.
The Supreme Court of Pakistan, in its interim order earlier on Thursday, had declared the mechanism of basing CNG prices on the price of petrol illegal, ordering Ogra to revise prices. The SC had also ruled that the profit rate and operating costs being charged on Compressed Natural Gas (CNG) were illegal.
According to the new notification issued Thursday by Ogra, CNG would be sold in Region 1 (Potohar, Khyber Pakhtunkhwa, and Balochistan) at Rs 61.64 per kg, while the price would be Rs 54.16 per kg for Region 2 (Sindh, Punjab,and its areas excluding Potohar).

CNG pricing mechanism unlawful: SC
During Thursday’s hearing of the case on petroleum products pricing, a two-member bench of the apex court, headed by Chief Justice Iftikhar, declared that both the profit of Rs 10 per kilogram on the price CNG and the linkage of CNG price with that of petrol were illegal.
Petroleum and Natural Resources Secretary Waqar Masood told the court that the weekly pricing mechanism for petroleum products had been suspended until the Economic Coordination Committee (ECC) of the cabinet gives its decision.
In his remarks, Chief Justice Iftikhar said that Compressed Natural Gas (CNG) stations earned a per kilo profit of Rs 11.91, adding that the price of CNG should not be linked with that of petrol and that the 50 per cent profit margin on CNG was strangulating the consumers.
Moreover, Oil and Gas Regulatory Authority (Ogra) Chairman Saeed Ahmed Khan submitted a report on the details of petrol and CNG pricing.
After reviewing the report, Chief Justice Iftikhar remarked that overcharging for CNG was tantamount to exploitation of consumers.
According to the Ogra report, the government’s procurement cost of CNG in Region 1 was Rs 19 per kilogram whereas the per kilogram price of CNG in Region 2 was Rs 17.57 and that the government decided on the price after including development surcharges.
The chief justice moreover inquired as to why the government was charging an exorbitant amount on the pretext of operating costs and said that exploitation of consumers would not be allowed.

link: http://dawn.com/2012/10/25/cng-price-should-not-be-linked-to-petrol-price-cj/

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