Inside Financial Markets

Ministry asks CNG sector to retire Rs 40 billion dues

Ministry of Petroleum asked the CNG sector to retire its outstanding dues of Rs 40 billion collected under the head of Gas Infrastructure Development Cess (GIDC) here on Wednesday. A meeting of the special committee was held to discuss the implementation on report of committee on Infrastructure Development Cess Bill 2015. Senator llyas Ahmed Bilour convened the committee.

Federal Minister for Petroleum Shahid Khaqan Abbasi said that the ministry is conditionally ready to negotiate with the CNG sector if they agree to withdraw all court cases against the ministry. He said the government would not give the waiver and CNG sector should come up with schedule of retirement of GIDC amount collected by CNG stations from public till deregulation of CNG prices.

The minister also agreed that it was difficult to determine whether or not the CNG Association collected GIDC. He said the CNG sector did not have data to show whether or not GIDC is being charged on the consumers. He further acknowledged that it is hard to run CNG stations as the Oil and Gas Regulatory Authority (OGRA) does not allow the sector to raise rate of gas used as CNG.

The ministry has estimated that recovery from the CNG stations under the head of GIDC is Rs 30 billion, in addition to Rs 10 billion as late payment surcharge (LPS). The CNG Association opined that GIDC was not charged and total amount of GIDC was around Rs 10 billion.

The exchange of harsh words between Senator Muhammad Talha Mahmood and the CNG representatives was witnessed, following the boycott of CNG Association from the proceedings of the committee. Senator Muhammad Talha Mahmood alleged that CNG Association collected Rs 200,000 to Rs 400,000 from each petrol station to resolve the issue of GIDC.

Central chairman of All Pakistan CNG Association, Ghiyas Abdullah Paracha got furious and blamed the senator for telling a lie. Following which the CNG representatives boycotted the proceeding on his remarks. Senator Talha argued that he had information about what he claimed.

Earlier, convenor committee directed the ministry and CNG Association to sort out their differences on GIDC through a fruitful dialogue. The committee was informed that a total of Rs 100 billion on account of GIDC was outstanding against various sectors, including captive power plants (CPPs), compressed natural gas (CNG) stations, general industry and others.

The committee also gave the ministry 2-week time to formulate mechanism on the recommendations of the committee regarding retrospective charges under GIDC. The committee discussed its earlier recommendations that no retrospective GIDC will be charged on captive power producers (CPPs). The rate of GIDC for CPPs for future after promulgation of GIDC Act should be brought down at par with the industrial sector. It was further discussed that the small power producers (SPPs) and new captive power producers (NCPP) will be treated at par with IPPs.

The minister for petroleum said that it was the subject of Ministry of Finance, adding that his ministry was unable to reduce the rates of CPPs owned by textile ministry. He said that 200 industrial units are enjoying windfall profit from CPPs along with electricity from grids. The minister maintained that CPPs rates could not be reduced because other sector, like fertilizer sector, would also demand reduction in gas rates.

He further challenged the jurisdiction of the committee for its role in determining the future rates for CPPs. He said its mandate is to resolve the anomalies in GIDC before promulgation of GIDC Act 2015.

Baqar Hussain

A Wannabe CFO, just had stepped in the corporate sector, willing to explore every aspect here and learn as mush as i can, awareness for those who dont, get the info where ever possible and stay up to date always.

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