Govt gives nod to GIDC recovery from CNG sector

ISLAMABAD: The cabinet has given go-ahead for recovery of Gas Infrastructure Development Cess (GIDC) from the Compress Natural Gas (CNG) sector.

This was stated by senior officials of the Ministry of Petroleum and Natural Resources on Thursday during a meeting held of Senate Standing Committee on Finance, reported Business Recorder.

The parliamentary panel was apprised that during a federal cabinet meeting held on 3^rd January 2018 the directive was issued for GIDC recovery from the CNG sector.

Committee was informed the stuck amount would be recovered in tranches, with the first being recovered in one month after successful passing of the bill and the second three months later after the parliament clears the bill.

In August, it was reported GIDC Act 2015 was to undergo revisions by the incumbent government, which would allow waiver half of cess arrears amounting into billions of rupees owed by the Compressed Natural Gas (CNG) sector.

All Pakistan CNG Association Chairman, Abdullah Paracha then disclosed they had reached an agreement with Oil and Gas Regulatory Authority and the petroleum ministry to pay Rs12b on account of GIDC.

Rs12b is half the amount owed by the CNG sector for provision of gas supply to their filing stations said a senior official of OGRA.  This payment of Rs12b covers the period of Jan 2012 to May 22^nd, 2015.

GIDC Act 2011 which was passed by Parliament a few years ago for raising money to establish pipelines created a huge furor and this surcharge got challenged in various courts because its impact originally was not being passed onto consumers.

Although the gas prices reflect the cess surcharge and is being collected by CNG stations as per law, but the payments have been withheld and haven’t been deposited with Sui Northern Gas Pipelines (SNGPL) and Sui Southern Gas Company (SSGC) due to courts stay orders. SSGC and SNGPL are then required to deposit this cess payment into the federal kitty.

CNG industry was said to have already paid Rs19b under GIDC and now Rs12b will be paid for the period of Jan 2012 to May 22^nd,2015.