Compressed Natural Gas (CNG) essentially consists of methane as an alternate fuel source for vehicles. It is the most environmentally friendly, safe, and economical fuel source on the market today.As opposed to popular belief, CNG is not a new fuel source; rather it has been in use for quite some time now. Vehicles in the United States of America, United Kingdom, Canada, China, India, Argentina, Brazil and Pakistan are being run on this fuel. In most developed countries CNG is being promoted for environmental reasons as opposed to economic reasons in developing countries like Pakistan.

CNG is an old and well-proven fuel alternative and with the passage of time and due to demands of the consumer a lot of R&D and innovations have taken place. CNG equipment manufacturers have been investing a lot of money in research and development so as to improve this technology and make it convenient and available for consumers globally.

In Pakistan, the development of the CNG industry started in mid-eighties when the Hydrocarbon Development Institute of Pakistan (HDIP), set up two stations as pilot projects, one in Karachi and Islamabad. Today there are more than 150 CNG refueling stations and approximately the same number of car conversion centers throughout the country. In the last two years, due to soaring prices of crude oil, the CNG industry has entered the mainstream fuel market in Pakistan, and has matured considerably. It offers great financial incentives both to investors and to common consumers. As opposed to the previous view of converting only public transportation, we are nowadays seeing a great number of private car owners converting to this alternative fuel source.

Due to indigenous production and an excellent distribution network of natural gas, Pakistan 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.

Oil and Gas is one of the most attractive avenues of investment in Pakistan. Financial analysts have estimated that this sector alone will attract investments worth USD 5 billion. The Compressed Natural Gas industry, being a part of Oil and Gas sector, is also attracting huge investments and it is estimated that the CNG industry, in the next three to five years, will be able to attract investments worth USD 600-700 million.

Investment in the CNG industry is coming in the shape of setting up CNG refueling stations and CNG conversion centers.

CNG refueling stations and CNG conversion centers can only be set up by licensed operators. The brief procedure for obtaining a NOC for setting up CNG refueling station can be obtained by clicking here

1. On existing petrol pumps

2. On separate piece of land

Existing Petrol Pump Owners or Dealers and Oil Marketing Companies (OMC), like PSO, Shell, and Caltex, are inviting third party investments on existing petrol pumps. In the case where a CNG station is being set up on existing petrol pumps, certain royalty (on the amount of sales) has to be paid to the OMC and the concerned dealer

The CNG industry is one of the most profitable industries in the country during these hard financial times. The breakeven for one refueling station is approximately 24 months. Seeing the profitability and low risk in this industry, local financial institutions and leading companies have entered this market by financing these projects. Feasibility reports for setting up CNG refueling stations can obtained by emailing us at info@al-nafeh.com

The CNG industry in Pakistan is governed by the CNG Act of 1992 which is a very comprehensive document covering safety, regulatory, and other aspects of the CNG industry. It is recommended that every investor should read this Act thoroughly in order to have a complete idea about government regulations and safety parameters. A copy of CNG Act 1992 can be obtained upon request via e-mail.