To meet IPI gas line expenses: Ogra allowed to include up to Rs 3 per BTU in gas bills

The Economic Co-ordination Committee (ECC) of the Cabinet on Wednesday allowed Oil and Gas Regulatory Authority (Ogra) to include up to Rs 3 per BTU in gas bills to meet the expenses of the Iran-Pakistan-India (IPI) gas pipeline.
This inclusion in the gas bills is premature considering that the US geopolitical interests in the region have to-date militated against the IPI agreement being finalised - US pressure on Pakistan in particular is unlikely to abated in coming years.
"The ultimate benefit of developing gas import project will go to consumers through the gas companies. So, the revenue expenditure on their development should also be borne by them," the Petroleum Ministry argued in its summary.
The IPI steering committee/subcommittee of the ECC in its meeting on July 15, 2008 had recommended that revenue expenditure of ISGS may continue to be included in the operating costs of SSGC and SNGPL respectively, in the ratio of their current shareholding 51:49, to be recovered from gas consumers in the form of consumer gas tariff.
The meeting once again disputed the proposal of Rs 12 billion package for textile industry that infuriated Textile Minister Ahmed Mukhtar who directed the secretary to take the proposal back as he would have got it approved from the Cabinet now.
The participants of the meeting raised serious questions about the performance of the textile industry with some members asking as to what the ministry has done with the amount it was given last year. Some members dubbed the textile bailout package as "social welfare programme for the rich."
The meeting approved additional amount of urea and rejected a proposal of the Ministry of Food Agriculture and Livestock (Minfal) for export of rice fearing that the proposal was similar to that of wheat export that had created shortage of the commodity in the country.
As a result the previous government who had allowed export of wheat initially was forced to import it on double price following a severe shortage of the commodity in the domestic market. The meeting directed the Minfal to fix minimum price of the rice and if the price of commodity goes further down in the local market the Trading Corporation of Pakistan would intervene by purchasing surplus stock.
The meeting also turned down a proposal of the Interior Ministry regarding exemption from allied taxes and customs duties on import of weapon/ammunition for civil armed forces with directives to first calculate the revenue impact of the proposal then bring it to the meeting for consideration. Meanwhile, the meeting allowed gas allocation for three power plants that are to be set up in different parts of the country.