” Special Report “
ISLAMABAD: Domestic consumers may face another tough winter after successive governments failed to utilize Rs368 billion collected under the Gas Infrastructure Development Cess (GIDC) and Gas Development Surcharge (GDS) for the development of key gas conduits with regional countries.
According to source an audit of the projects and other communications, showed that the government could not make due progress on building pipelines from other countries in the region to import gas. However, it did not stop the government from collecting billions from consumers in this regard. Collection Since the inception of the GIDC, Rs1,15.61 billion were recovered from consumers of Mari Petroleum Company Limited (MPCI), Rs97.39 billion from Sui Northern Gas Pipelines Limited (SNGPL), Rs63.63 billion from Sui Southern Gas Company Limited (SSGC), Rs30.87 billion from Oil and Gas Development Company Limited (OGDCL) and Rs30.87 billion were recovered from Pakistan Petroleum Limited (PPL).
Cess was charged at rates of around Rs100 to Rs300 per MMBTU since 2011 from consumers of different sectors, including fertilizer feed and fuel, captive power, industrial, Karachi Electric Supply Company (KESC), power generation companies (Gencos), independent power producers (IPPs) and compressed natural gas (CNG). “Islamabad Director General (Gas) collected GIDC amounting to Rs325.12 billion up to June 30, 2021,” the report read. Out of the total collection, the government could only utilize an amount of Rs2.81 billion on the development of gas infrastructure,“ according to the audit report. This meant that around Rs322.30 was left unutilized.
The Gas Infrastructure Development Cess Act 2015 was enacted to ensure money collected as cess is used to develop gas infrastructure.
Section 4 (1) of the act notes that the cess shall be utilized for infrastructure development of the Iran-Pakistan Pipeline Project, Turkmenistan-Afghanistan-Pakistan-India (TAPI) pipeline project, LNG, or other ancillary projects by the federal government. Usage of cess
It is worth noting that the Supreme Court of Pakistan, in its August 13, 2020 judgment, restrained the federal government from charging cess till the amount collected by July 31, 2020, was expended on the projects listed in section 4 of the GIDC Act, 2015.
According to the office of the Auditor General of Pakistan, poor project management resulted in the underutilization of GIDC funds which was reported to the management in August 2021.
