The government is likely to reduce the price of Compressed Natural Gas (CNG) by up to Rs. 7.50 per kg, effective from June 16.

Minister for Petroleum and Natural Resources Dr Asim Hussain has agreed to reduce CNG price in Khyber-Pakhtunkhwa, Balochistan and Potohar regions by Rs 7.5 per kg, while in Sindh and Punjab the price of the commodity will be decreased by Rs 6.90 per kg, an official source in the Petroleum Ministry said.

According to the official, as per the agreement with CNG Association, the government is bound to keep CNG prices 45 percent low as compared to petrol. However, from June 16 this parity between the CNG and Petrol prices would be brought down to 40 percent level.

Sources added that the government would brought down petrol price on June by Rs10.50 per litre and as per current agreement with the CNG association the commodity price should be decreased by Rs 12 per kg from June 16, but due to the on-going tussle between the Petroleum Minister and CNG Association it would not happen.

The government on June 1 reduced the petrol price by Rs. 3.39 per litre and according to the agreement with CNG body a reduction of Rs 2.85 per kg in the price of CNG was expected, the sources maintained.

They said that the Petroleum Minister did not approve the reduction in CNG price, as the CNG association announced not to accept government's move to increase Gas Infrastructure Development Cess (GIDC).

Official added that in the current fiscal year the government has collected approximately Rs 45 billion on account of GIDS and within next two years it will collect another Rs 120 billion so within three years the government would collect an estimated Rs 165-170 billion.

According to details, the surcharge for the KPK, Balochistan and Potohar regions will be increased up to Rs 300 per mmbtu and Rs 200/mmbtu in Sindh and Punjab.

Furthermore, the GIDC for the fertilizer sector will jump from Rs197/mmbtu to Rs300/mmbtu as per the decision of the ministry. Similarly, the surcharge imposed on the industrial sector will also see an increase from Rs 13/mmbtu to Rs 100/mmbtu, while the figures for the KESC, including Wapda-run power plants, are going to be hiked from Rs 27/mmbtu to Rs 100/mmbtu. Again, the surcharge on IPPs will surge from Rs 70/mmbtu to Rs 100/mmbtu.

The Oil and Gas Regulatory Authority (OGRA) in a bid to provide relief to the gas consumers on May 18 approved a reduction of Rs 47.54 per Million British Thermal Unit (MMBTU) in consumer gas prices for SNGPL and Rs 34.34 per MMBTU for Sui-Southern Gas Company (SSGC) for 2012-13, which was rejected by the Petroleum Minister. -Copyrights Business Recorder-