Govt initiates process to recover Rs417 bn GIDC

ISLAMABAD: The government has initiated the process to recover Rs417 billion collected by various sectors of economy in the head of GIDC (Gas Infrastructure Development Cess) and to this effect the Petroleum Division has asked the heads of gas companies, and public sector exploration and production companies to initiate the recovery process with immediate effect.

Director Technical of Directorate General of Gas on behalf of the Petroleum Division has written a letter on August 19, 2020 (Wednesday) to the managing directors of Sui Southern, Sui Northern, Pakistan Petroleum Limited, OGDCL and Mari Gas Companies to initiate the recovery of arrears amounting to Rs417 billion accrued up to July 31, 2020 in 24 installments from all defaulting consumers from August 1, 2020.

The letter also mentions that there will be no LPS (Late Payment Surcharge) on the arrear amounts except where the consumer defaults in a payment of installments. The letter also says that the gas bills for the months of August 2020 and onwards will not include the GIDC or reflect the GIDC rates and will remain unbilled till further orders. A three-member bench of the apex court had reserved the verdict on February 20, which was announced on Thursday (August 13, 2020).

A senior official of the Petroleum Division said that the decision of the Supreme Court is a time bar. So the government has no option but to immediately start recovery of GIDC amounting to Rs417 billion from the industrial and commercial sectors such as CNG, fertilizer, captive power industry, KEL, GENCOS, and IPPs as the said entities have already collected GIDC from the consumers but they did not pay to the government.

He said that GIDC amounting to Rs295 billion is already with the Finance Division and the financial managers of the incumbent government during the hearings in Supreme Court had given the undertaking whenever Petroleum Division asks for the release of the amount of Rs295 billion will be sanctioned to the gas companies for building the gas pipeline. Right now the government wants to build the North-South gas pipeline which will be dedicated for the transportation of RLNG from Karachi to Lahore.

The recovery of Rs417 billion will be a breather for the government. He said that the decision of the Supreme Court is doable as the apex court has given the breather to the various sectors to pay to the government the collected amount of Rs417 billion in the head of GIDC in 24 installments and there will be no late payment surcharge.

The PPP-led government had imposed in its last rule the GIDC to generate the financial resources for the gas development infrastructure in the country including the proposed IP and TAPI gas pipelines, but the Nawaz-government instead of using the GIDC amount in building the RLNG-1 and RLNG-2 gas pipelines, refused to provide the GIDC amount, rather it had decided to use it for budget financing. The gas companies (SSGC and SNGPL) had to borrow over Rs100 billion from banks for building the existing RLNG pipelines 1 and II.

It is pertinent to mention that the incumbent regime had waived Rs220 billion out of Rs417 billion but because of severe criticism from media persons and opposition, the PTI government had to take back its decision.