Cabinet approves recovery of GIDC from CNG sector

ISLAMABAD: The Ministry of Energy (Petroleum Division) informed the Senate Standing Committee on Finance and Revenue that the federal cabinet had given approval to the recovery of Gas Infrastructure Development Cess (GIDC) worth billions of rupees from the CNG sector.

The GIDC is being collected from the consumers of various categories, except residential ones, for more than five years with the sole objective of arranging funds for gas pipeline infrastructure to facilitate utilisation of imported gas, including LNG and that proposed to be imported from Turkmenistan and Iran. The government had given undertakings to parliament that GIDC would be used to spread gas pipeline network.

The official of the ministry informed the committee that the federal cabinet had approved it on 3 January 2018. Regarding the GIDC Amendment Bill, 2017, the official informed the committee that that soon it will be tabled in parliament for approval. On the approval of bill from the parliament, Rs12 billion would be recovered from the CNG sector in two installments.

The GIDC was implemented through an act i.e. GIDC Act 2015 of parliament. As the government wants to settle the GIDC issues, for which amendment in the GIDC Act 2015 was needed. A 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 9 October 2017 which was referred to Cabinet Committee on Disposal of Legislative Cases (CCLC) for consideration. The CCLC in its meeting herd on 2 November 2017 considered the summary. Based on the recommendations of CCLC, a summary was submitted to the federal cabinet for ratification of the decisions of the CCLC. CNG stations owe Rs40 billion to the government, as they have collected it as GIDC from the consumers and some of them have already paid it to the government while other gone to the court, the ministry official said.

CNG stations have been collecting Cess on CNG sale price in accordance with the notification issued by Oil and Gas Regulatory Authority (Ogra) but a significant portion of the amount was not deposited to SNGPL and SSGCL for its onward payment to the federal government due to various courts’ stay/restraining orders.