ISLAMABAD - AHMAD AHMADANI - Law Division has turned down summary of Ministry of Petroleum and Natural Resources (MP&NR) seeking further addition in the already imposed gas infrastructure development surcharge (GIDS) up to Rs159/mmbtu on five various sectors including CNG by 1st July this year.
Informed circles told TheNation that Law Division has rejected the summary sent by the MP&NR seeking approval to give further hike up to Rs 159 per mmbtu in the already imposed GIDS by July. The MP&NR in its summary had sought imposition of Rs159/mmbtu for Khyber Pukhtunkhwa, Balochistan and Potohar regions on CNG, while Rs121/mmbtu on Sindh and Punjab regions on Compressed Natural Gas (CNG). Similarly, the ministry had sought addition in the surcharge (GIDS) worth of Rs103/mmbtu for fertilizer sector, and Rs87/mmbtu on the Industrial sector, while Rs73/mmbtu for Karachi Electric Supply Company (KESC) and Wapda power plants. Further, Rs30/mmbtu raise in the imposed GIDS for Independent Power Plants (IPPs) was also sought for implementation.
It was also learnt that Law Division while turning down MP&NR summary advised to get approval from the Council of Common Interest (CCI) while imposing GIDS on various sectors including CNG sector through finance bill. Proposed addition in the imposed GIDS on the CNG sector was estimated to further jack up CNG price by Rs15/kg by July in the country.
However, in accordance with official sources, no matter if the Law Division has rejected MP&NR summary, government has powers to impose surcharge under finance bill 2012.
Sources further informed that the imposed GIDS after this addition would witness raise from Rs141/mmbtu to Rs300/mmbtu in KPK, Balochistan and Potohar regions of the CNG, while addition from Rs79/mmbtu to Rs200/mmbtu in Sindh and Punjab.
This decision of addition of proposed raise in the GIDSwas to construct Iran-Pakistan gas pipelines and Turkmenistan-Afghanistan-Pakistan and India (TAPI) gas pipeline. Furthermore, this addition in the already imposed surcharge (GIDS) was estimated to earn a revenue for the finance ministry worth Rs102 billion annually in total while Rs55 billion for IP and TAPI gas pipelines.