ISLAMABAD: The Supreme Court on Thursday ordered to stop weekly pricing mechanism of CNG and POL products saying that price of CNG should not be linked with that of petrol.
During the hearing of the case on petroleum product pricing, Chief Justice Iftikhar Muhammad Chaudhry giving an order said the price of CNG should not be linked with that of petrol and that the exploitation of consumers would not be tolerated.
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.
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.
On Wednesday, The Supreme Court questioned the formula under which Oil and Gas Regulatory Authority (Ogra) linked the price of domestic Compressed Natural Gas (CNG) with imported petrol on a weekly basis.
Issuing notices to Managing Directors of Sui-Northern Gas Pipeline Limited (SNGPL) and Sui Southern Gas Company Limited (SSGCL) in oil pricing case, a two-judge bench of Chief Justice Iftikhar Muhammad Chaudhry and Justice Jawwad S Khawaja sought from Chairman Ogra Saeed Ahmed Khan a report on the formula used for gas pricing.
Chief Justice Chaudhry observed that the linkage of the price of imported petrol with the dollar was understandable. However, CNG is domestically produced. He, therefore, questioned its linkage with the price of imported petrol.
Chairman Ogra Saeed Ahmed Khan told the court that tariff was determined by OGRA subsequent to submission of a tariff petition by SNGPL and SSGCL twice a year (July and January). The Chief Justice observed that in that case tariff for the consumers should also be determined biannually instead of on a weekly basis.
According to the Chief Justice, Ogra is a regulatory body and as such it should not be influenced by either the government or the court in the discharge of its function. The Chief Justice further observed that there must be a mechanism under which OGRA should implement its policies as a regulator and should ensure the interests of consumers.