LNG sales tax strengthened to increase CNG prices

KARACHI: the Pan-Pakistani GNC Association (APCNGA) said on Thursday that imposing additional new taxes on liquefied natural gas (LNG) would increase the price of compressed natural gas (CNG) by around Rs6 to Rs9 / liter.

“This move will shut down hundreds of CNG stations, leaving hundreds of thousands of employees without jobs,” Ghiyas Abdullah Paracha, central leader of APCNGA, told BOL News on Thursday.

The government has increased the sales tax on imported liquefied natural gas (LNG) from 5% to 17%, he said, adding that CNG stations in Sindh and Punjab all use the imported gas.

Paracha said the government is also considering imposing a Gas Development Surcharge (GDS) of more than 200 percent, which would also impact local gas prices. “There is an Oil and Gas Regulatory Authority (OGRA) hearing on June 22, 2021, and the exact increase would be known [then]. “

Imposing a surcharge for gas development and increasing other taxes will hurt the gas sector, spoil investments worth hundreds of billions in the CNG sector and send a negative message, he said. -he declares.

The government was providing affordable energy to many sectors with an emphasis on boosting exports, but reducing the import bill was also necessary to close the trade gap for which the promotion of CNG was needed.

“All sectors have received relief in the recent budget, but the CNG sector has been subjected to severe treatment,” Paracha said.
“[The] The CNG sector pays the highest direct taxes and pays a premium for LNG and its shutdown can touch billions of dollars as CNG is the only sector to buy LNG without any subsidy or rebate. Closure of the CNG sector will increase pollution, increase fuel tariffs [the] public transport, increase the bill for oil imports and [the] budget deficit, ”he said.

Oil prices are rising on the international market; therefore, the decision, which may lead to the shutdown of the sector providing economical and environmentally friendly fuel, should be reconsidered and the government should offer a subsidy for CNG consumers, he added.

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