Federal government may not be able to collect Gas Infrastructure Development Cess (GIDC) for three years (2012-15) that compressed natural gas (CNG) sector agreed to pay unless GIDC Amendment Bill 2017 is passed by Parliament.
CNG sector agreed to pay Rs12 billion in two installments to the government subsequent to the approval of the Bill from Parliament. On January 3, 2018, Cabinet approved GIDC Amendment Bill 2017 but has yet to place it before Parliament.
According to Petroleum Ministry, the summary with respect to Amendment in GIDC Act, 2015 regarding settlement of arrears of GIDC from CNG sector was submitted to the federal cabinet on October 9, 2017 which was referred to Cabinet Committee on Disposal of Legislative Cases (CCLC) for consideration. The CCLC in its meeting held on November 2, 2017 considered the summary; and based on the recommendations of CCLC, a summary was then submitted to the federal cabinet for ratification of the decisions of the CCLC.
An official of Ministry of Petroleum told Business Recorder that CNG stations collected the cess on CNG sale in accordance with the notification issued by Oil and Gas Regulatory Authority (OGRA) but a significant portion of the amount was not deposited with the Sui Northern Gas Pipeline Limited (SNGPL) and Sui Southern Gas Company Limited (SSGCL) for onward payment to the federal government due to various legal challenges.
OGRA, while fixing CNG prices, included GIDC in the price and all CNG outlets collected it from the end consumers. The GIDC levied and collected and outstanding to SNGPL and SSGCL from January 1, 2012 till May 22, 2015 was Rs42.9 billion against CNG sector. Ministry of Energy, Petroleum Division in collaboration with Finance Division engaged CNG Sector through All Pakistan CNG Association (APCNGA) to formulate a mutually acceptable way forward. Both sides agreed that CNG Sector would pay half of the cess payable pertaining to period from January 1, 2012 till May 22, 2015. Chairman APCNGA, Ghiyas Abdullah Paracha told Business Recorder that the CNG sector is ready to pay Rs12 billion to government as per agreement but amendments to the GIDC Act are required.