Pricing of CNG and its availability has remained a major issue since then for the hundreds of thousands who rely on this cheap fuel to be mobile. The government, (APCNGA) and CNG Dealers Association have all weighed in with their own recommendations to resolve the issue. The government correctly argues that different prices of different fuels would automatically lead to consumers opting for the cheaper fuel. Thus even though gas, a local resource, is much cheaper to extract and distribute than imported petrol yet its price must not encourage consumers to favour one fuel disproportionately over another as that would lead to a massive distortion in demand-supply of that particular fuel as is evident in the case of CNG. The price of all fuels, the government further accurately maintains, must be linked to their calorific value - British Thermal Unit (BTU) - or in other words, price of different fuels must be determined on the basis of the energy released.
The APCNGA argues that the price of gas to CNG stations is 31.09 rupees per kg while its price to industry is much lower (for fertiliser industry it is 5.84 rupees per kg and 23.12 rupees for industry). Total cost of CNG, the Association claims is 55.42 rupees per kg to CNG stations, 13.59 to fertilisers and 32.09 rupee per kg to industries. The government's rationale is again premised on sound economics: the objective in setting a lower price for industry relative to CNG is to increase the Gross Domestic Product growth rate and employment opportunities as well as generate foreign exchange through export earnings. And fertiliser, a key input for farm yield that uses gas as a basic input, is necessary to ensure our food self-sufficiency with failure to meet local demand accounting for scarce foreign exchange reserves used for import of fertiliser. This view is at odds with the conclusions of the National Assembly's committee led by Dasti which is unfortunate as one would have hoped that the government at least takes its own party members on board and convince them of the efficacy of its policy.
The Association maintains CNG is charged a cess but the money so collected would enable the government to generate resources for undertaking projects like the Iran-Pakistan gas pipeline, the Turkmenistan-Afghanistan-Pakistan-India pipeline and import of LPG. Sale of CNG to all private and public vehicles is neither targeted to the vulnerable as the rich are entitled to purchase CNG at the same rate nor does it increase productivity. There is, therefore, a need to make it available for public transporters as well as restrict its sale to cars under 1000 cc.
The CNG Dealers Association, another organisation reflecting the interests of the dealers/CNG station owners, claim that the court was misinformed about the calculation of their profits and operating costs and have hired a lawyer to represent their case in the court. This association also claims that the sector is not subsidised and instead pays 80 billion rupees to the government as tax. The reference is to the cess, and other taxes the government imposes on the CNG sector as well as on other forms of fuel which are of course passed onto consumers.
To conclude, for a resolution of the crisis, it is imperative that the economic rationale for setting the price be adhered to which dictates that the price of all fuels be linked to their calorific value. Interest groups understandably have their own agenda as do consumers. However, a national resource like gas must be used optimally for the benefit of the entire country and no specific group.