ISLAMABAD: The Petroleum Division is likely to take a bill for amendment to the Natural Gas Development Surcharge Ordinance/Rules, 1967 (GDS) for timely payment of dues to the provinces. A summary will be taken to the federal cabinet for approval, after vetting on the draft amendments from the Law and Justice Division, the Finance Division, and the Ministry of Energy (Power Division), sources said.

The federal government has been asked to clear GDS in time to provinces and not make part of oil and gas circular debt which swelled to Rs1.3 billion. The amendment to the GDS Rules will enable the federal government to clear payment to provinces on priority basis, the sources said.

According to Section 3 of the Natural Gas Development Surcharge Ordinance, 1967, every company shall collect and pay to the federal government a development surcharge equal to differential margin, in respect of gas sold by it. An amount of interest at 15 percent per annum, under sub-section 3, shall be payable in addition to the amount due, if the amount is not paid within the time specified for such period.

The GDS Rules 1967 amended on December 24, 2014, provide that collected amount shall be paid by gas companies in respect of the collection during a calendar month within one month of the close of that month, and if not paid within due date then interest will accrue.

As per amended rules, the GDS was payable within one month of the receipts from the buyer companies but no time limit was prescribed for payment by these gas companies. These rules are contradictory to the General Financial Rules and the GDS Ordinance 1967. The time limit for payment of the GDS cannot be left at the discretion of gas buying companies.

Copyright Business Recorder, 2020