Islamabad - Consumers in Region-I that includes Balochistan, Khyber Pakthunkhwa and Potohar are being charged higher Gas Infrastructure Development Cess (GIDC) on Compressed Natural Gas (CNG) as compared to the CNG users of Punjab, it was learnt through reliable sources here on Sunday.

“Currently GIDC for Region-I stands at Rs263.56 per MMBTU, while for Region II, that includes Punjab and excludes Sindh and Potohar, at Rs200 per MMBTU,” official sources told The Nation.

Oil and Gas Regulatory Authority (OGRA), via letter No OGRA-10-14(1)/2012, dated May 3 2016, referred the matter to the Ministry of Petroleum and Natural Resources.

In a letter to the ministry’s secretary, OGRA questioned the logic behind charging more GIDC from the CNG consumers of Region-1 compared to the consumers of other areas

“The matter of GIDC for all purposes and intents falls under the domain of the federal government,” the letter said, and added, “OGRA, in accordance with the policy guideline of the federal government, includes GIDC in the CNG consumer prices, and has no control over determining the rate of GIDC; therefore, the ministry should redress the issue.”

“Currently GIDC for Region-I, including Balochistan, Khyber Pakhtunkhwa and Potohar, is notified at Rs263.56 per MMBTU and for Region II, including Punjab, and excluding Sindh and Potohar, at Rs200 per MMBTU,” the letter said.

It added that the existing CNG consumer prices in energy equivalent terms computed to Rs1509 per MMBTU for Region-I and Rs1471 per MMBTU for region-II, leading to difference in rates of the same product.

The GIDC is being collected from the consumers of various categories, except residential ones, for more than five years with the sole objective of arranging funds for gas pipeline infrastructure to facilitate utilization of imported gas, including LNG and that proposed to be imported from Turkmenistan and Iran.

The government had given undertakings to parliament that GIDC would be used to spread gas pipeline network.

OGRA swung into action in response to the complaint lodged by the KP government with the authority.

In a letter written to the OGRA on April 19, 2016, the KP government had brought to its notice that consumers in the province were paying more for the CNG compared to the consumers of other regions, due to higher GIDC, which is illegal.

OGRA was asked to rectify the anomaly with immediate effect and ensure that same was not repeated again. It was also requested to recover the extra amounts from SNGPL and reimburse the same to the consumers of Zone I. KP consumers are allegedly paying 2.61 percent more than the consumers in Punjab.

According to the breakdown, the Calorific Value BTU/cft of one kilogram CNG in Region-I is 1040 and in Region- II is 950. The cost of one kilo gas in Region-I is 9.5 percent higher than that of Region-II; the prices are Rs35.17 and Rs32.12, respectively.

The GIDC charged on one kilo CNG in Region-I is Rs13.24, which is 44.23 percent higher than that of Region-II, which stands at Rs9.18.

The electricity cost, Rs 6.32, operating expenses, Rs5.06 and the margin, Rs5.01, are same for both the regions.

The total value added cost of per kilo CNG is Rs64.8 for Region-I and Rs57.69 for Region-II: Region-I is paying 17 percent GST, amounting to Rs11.02 per kilo, whereas Region-II is paying Rs9.81.