Pakistan Country Report January 06

– 800 CNG refueling stations
– 300 more expected within 6 months
– Almost 900,000 natural gas vehicles (NGVs)
– CNG fuel price a major benefit

Compressed natural gas (CNG) development in Pakistan started in the mid eighties when HDIP* set up two CNG refueling stations in Karachi and Islamabad (major cities of Pakistan). Due to excellent production and distribution of natural gas in Pakistan, today there are more than 800 CNG refueling stations operational either at existing petrol stations or separately on dedicated sites. 300 more are expected in the coming six months.

CNG, being a well proven alternative fuel with passage of time, has increased its consumers in Pakistan to almost 900,000 vehicles making Pakistan the 3rd largest user of CNG vehicles in the world after Argentina and Brazil. Around 150,000 vehicles are converting to CNG each year.

State of the Art Equipment

CNG refueling stations of Pakistan are equipped with state of the art automatic controls and systems. High Pressure Compressors installed are of various design types like L-type, W-type, V-type, D-type. These Compressors are usually imported from America, India, New Zealand and China. Mother/Daughter CNG stations in Pakistan are not operational currently, however Pakistan State Oil (PSO) signed an MoU with a UAE based firm last year for the setting up of Mother/Daughter CNG facilities at their retail outlets on highways at 100 km intervals where piped gas is not available. Currently there are no vehicle refuelling appliances (VRAs) operating in Pakistan.

Favourable Pricing

In the past 3 years petroleum product prices have increased by 100% and CNG by 47% (from Rs.21/kg to Rs.31/kg) in Pakistan. This has been a significant driver for the conversion of vehicles to CNG. Current fuel prices in Pakistan are:

Petrol Rs. 56.29 / liter ($US0.94)
Diesel Rs. 37.18 / liter ($US0.62)
CNG Rs. 31.00 / kg ($US0.52)
(Prices obtained from PSO)

Government Policy & Support

The Government is taking major steps to promote CNG by exempting all taxes and duties for the machinery and equipment used for CNG refueling and conversion. The Government is also supporting importers to set up manufacturing facilities in Pakistan to produce CNG kits, CNG Dispensers and CNG Cylinders locally. The Government has planned to grant license for setting up compressor factories in Pakistan, thus allowing users to save its precious foreign exchange.

A few months back the Government also issued directives requiring conversion of all official vehicles to CNG. In this regard the Government is planning to set up more and more CNG refueling stations by tendering in different cities.

Different CNG associations are also working in Pakistan for betterment of CNG. They have asked the Government to give incentives in the form of providing separate higher flow or larger diameter pipelines to refueling stations and to facilitate in obtaining ‘No Objection Certificates’ (NOC’s) and licenses from different Government organizations.

Future Prospects

In short, the CNG industry has a wide potential in Pakistan; Pakistan being the natural gas producer and having an excellent distribution network is well geared to use this resource to its maximum potential, in terms of protecting its environment, saving its precious foreign exchange, and offering economical fuel to its population.

* HDIP = Hydrocarbon Development Institute of Pakistan, an autonomous body of the Ministry of Petroleum & Natural Resources, Pakistan

Some information sourced from DAWN Newspaper