After new LNG taxes in budget 2021, CNG price expected to jack up to Rs9/kg in Pakistan

• CNG prices expected to go up Rs9/kg.
• All Pakistan CNG Association says imposition of new and additional taxes on LNG will increase price of CNG from Rs6 to Rs9.
• Most sectors were provided relief in the recent budget, but the CNG sector was treated harshly, says Ghiyas Paracha, a central leader of APCNGA

ISLAMABAD: Compressed natural gas (CNG) will soon become more expensive, with the price increase expected to go up to Rs9/kg after additional taxes were proposed on liquified natural gas (LNG) in the budget for fiscal year 2021-22, according to a trade association.

The All Pakistan CNG Association (APCNGA) said the imposition of new and additional taxes of LNG will increase the price of CNG from Rs6 to Rs9, The News reported Friday.

The government has proposed an increase in general sales tax on RLNG. This close down hundreds of CNG stations and leave hundreds of thousands of employees jobless, APCNGA said.

“Impositions of gas development surcharge and increasing other taxes will hurt the gas sector, hurt investment worth hundreds of billions in the CNG sector and send a negative message,” the publication reported Ghiyas Paracha, a central leader of APCNGA, as saying.

The government has estimated to collect Rs36 billion on account of gas development surcharge during the next fiscal year against the revised estimates of Rs27 billion for the outgoing fiscal year, while the budgeted target for FY21 was Rs10 billion.

Read more: Gas crisis grips Pakistan; CNG pumps closed, pressure dips

Affordable energy is being provided by the government to many sectors with a focus on boosting exports, but a reduction in the import bill is also necessary to reduce the trade gap, Paracha said, adding that promotion of CNG is necessary for this.

Most sectors were provided relief in the recent budget, but the CNG sector was treated harshly, he said.

“Reduced petroleum levy is promoting the usage of petrol and diesel while CNG is paying for the policy and a further hike in CNG price will be devastating,” he said.

The CNG sector is paying the highest direct taxes and paying full price for LNG and its closure can hit the LNG project worth billions as CNG is the only sector buying LNG without any subsidy or discount.