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Pakistani Busmakers Cutting CNG Bus Prices by 15%

Gulf Times. Pakistani busmakers are cutting the prices of their locally produced and compressed natural gas (CNG) buses by 15% following the government’s decision early in December to zero-rate sales tax on the import and supply of all buses which can carry 40 or more passengers, including CNG buses.

As part of the same action on 6 December, the Economic Coordination Committee (ECC) of the cabinet also zero-rated the sales tax on purpose-built taxis and abolished the 5% customs duty on the import of liquid petroleum gas (LPG).

Mohamed Irfan Shaikh, Director Marketing and Sales, Hinopak Motors Limited (HML), said that bus sales had been restricted to government’s institutional buying while the share of commercial sales had been hovering at 15-20% of total sales which was alarming for local industry.

Irfan said that the arrival of 3,000 used buses from Japan and Singapore in 2006 had dealt a crippling blow to the local sales while the total bus demand of one year is just 800-1,000 units.

...On the other hand, locally-produced CNG buses have also been facing problems as investors have not lifted a single unit yet.

“The operational cost is very high and it can be curtailed, if the government provides subsidy on gas prices,” [Irfan] said.


Rafael Seidl

Pakistan has quite a bit of natural gas of its own, though much of it is located in the somewhat volatile province of Baluchistan in the south-west. In addition, Iran and Turkemenistan have significant reserves of gas which both Pakistan and India would like to tap into.

Therefore, increasing the share of CNG vehicles in Pakistan makes eminent sense economically, even if the politics are rather complicated. From an environmental point of view, CNG is a sensible option for large vehicles such as buses as well as passenger cars that accumulate high annual mileage tallies.

It is possible the influx of foreign-built used CNG buses was permitted both to ease traffic congestion and air pollution and, to light a fire under the domestic manufacturers to provide better value for money.


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