ISLAMABAD: Despite being one of the countries most vulnerable to climate change, Pakistan has experienced a sharp decline in the use of cleaner transport fuel, with consumption of Compressed Natural Gas (CNG) falling by 83 percent over the past 13 years.
According to the State of the Regulated Petroleum Industry 2024–25 report released by the Oil and Gas Regulatory Authority (OGRA), CNG consumption in the transport sector dropped from 325 MMCFD in FY2011–12 to 55 MMCFD in FY2024–25, reflecting a sustained downward trend throughout the period. The report noted that gas consumption in the CNG sector has exhibited a clear downward trajectory over the past decade.
Introduction and Regulation of CNG
CNG was introduced in Pakistan in 1992 as an alternative automotive fuel to reduce environmental degradation and conserve foreign exchange. The sector was regulated under the CNG (Production & Marketing) Rules, 1992, along with a Standard Code of Practice for refueling stations. In February 2008, the federal government imposed a ban on new provisional licenses for CNG stations.
In FY 2011–12, consumption stood at 325 MMCFD, representing the peak of CNG usage in Pakistan. Since then, consumption has steadily declined, reaching 55 MMCFD in FY 2024–25.
Current Status and Revival Prospects
While the sector's contribution has significantly reduced, CNG remains relevant as a cleaner burning fuel option. The Economic Coordination Committee's decision to allow RLNG-based licensing provides an opportunity for revival, contingent on infrastructure development and market demand.
In its annual report 2024-25, OGRA claimed that in the CNG sector, by granting a significant number of provisional construction and marketing licences on RLNG basis, it is enabling growth, innovation, and accessibility. According to the report, during FY 2024-25, a total of 28 provisional construction licences were granted to CNG stations on RLNG basis, 9 marketing licences were issued on RLNG basis, 94 CNG marketing licences were renewed, while 55 licences were cancelled or revoked. Similarly, 808 inspections of operational CNG stations were conducted, resulting in the issuance of 137 show-cause notices and imposition of penalties amounting to Rs4.55 million.
Future growth will depend on the integration of RLNG, regulatory support, and consumer adoption in urban transport systems. The CNG sector has transitioned from being a major component of Pakistan's transport energy supply to a niche segment, the report added.
In contrast, petrol and diesel consumption in transport jumped 11 percent to 14.78 million tonnes in 2024-25 from 13.60 million tonnes in FY 2023-24.
