The country’s oil imports are likely to increase substantially due to suspension of gas supply to the CNG sector, informed sources told Business Recorder. Sources added the Petroleum Ministry has argued in a proposal that was submitted to the Economic Co-ordination Committee (ECC) of the Cabinet that if petrol replaces CNG the country’s oil imports would rise substantially to meet the existing 485 mmcfd gas supply to CNG.
However, if LNG replaces CNG the country can save $1.4 billion yearly on account of oil import bill. Sources in the Finance Ministry said that as gas supply to CNG stations has been suspended during winter, shifting of vehicles on petrol would increase the country’s oil imports but it is difficult to quantify given the projected decline in international oil prices for the next six months to a year.
Sources added that gas supply to CNG sector was around half of the demand. Gas supply to the CNG sector stood at 243 mmcfd against the demand of 478 mmcfd. Total number of CNG stations stands at 2292 in Punjab with 300 mmcfd demand, however, supply is 93 mmcfd two days a week. Gas supply to 593 CNG stations in Khyber Pakhtunkhawa is 68 mmcfd for seven days against the demand of 78 mmcfd. In Sindh there are 612 CNG stations that are supplied 78 mmcfd five days a week against the demand of 97 mmcfd. Gas supply to 20 CNG stations in Balochistan stood at four mmcfd.
Sources added that the ECC was further informed that keeping in view gas demand and supply projections, supply of gas to CNG sector will further decrease in the coming years and most likely be completely cut off during next winter. As such survival of the industry, in the absence of gas supply, is difficult. If this industry is shut, vehicles equipped with CNG kits will have no option but to use petrol, which will entail significant increase in oil imports of the country. If petrol is going to replace equivalent of gas consumed by the CNG sector annually, it will have an impact on the country’s oil import bill.
They further stated the Petroleum Ministry maintains that there is urgent need to take steps for the survival of CNG industry as it provides financial relief to general public by providing low-cost transportation fuel for passenger vehicles (both public and private) and carriage for goods. The industry provides Rs 7,000 to Rs 10,000 per month relief in fuel expenditure to average households and small transporters, which has a direct bearing on inflation.