The Sindh government is preparing a case to express its reservations over the large gap in prices between the gas produced by Sindh that is utilised across the country and the gas to be imported from Iran and Turkmenistan, Pakistan Today has learnt.
The case report, which also discusses the issue of imposition of gas tax in Sindh, will be sent to the federal government for further perusal.
Sindh government coordinator and Pakistan People’s Party (PPP) general secretary Taj Haider has sent a summary to the provincial chief minister, stating that Sindh is not importing any gas but also exporting gas to other provinces. According to Article 158, under which a province has “precedence over other parts of Pakistan in meeting its requirements” from its own wellheads, has been totally ignored.
“Sindh is already facing grave economic setbacks because the gas requirements of its consumers are not being met, which is their constitutional right under Article 158,” it was said in the report. “Our power plants, fertiliser plants and industries suffer large idle capacities because Sindh’s gas is being sent to other parts of the country.”
Haider, in his letter numbered CO/GS-321/2012, mentions that on top of it, Sindh shall be paying an additional cess for building the infrastructure required for importing gas, which it does not need, that will ultimately used in other parts of the country.
In the report, it is stated that there is a huge difference in prices being offered to the gas produced by Sindh and the gas which will be imported from Iran. The companies are paying only $4.00 for the same amount of gas bought from Sindh for which a recent agreement with Iran was signed at $11.00. There is no need for the large price differential of gas produced at home and being imported.
“The provision of price equalisation is the most damaging for us. The price ration between the gas we produce and imported gas is 4:10. It means that consumers in Sindh shall be given a heavy subsidy on the gas utilised by consumers located in other parts of the country, and not needed or utilised by consumers in Sindh,” it was stated in the letter.
“If the federation is ready to pay so high for imported gas, then it is logical to demand that Sindh should be paid something extra for the cheap gas being produced in the province and a large part of which is being wasted in other parts of the country especially urban Punjab like leakages due to supplies at high pressure and burning in open and unsafe heaters.”
The summary further claimed that while Sindh does not need imported gas or any infrastructure for imported gas, it needs heavy investments for building gas purification and dehydration plants and pipelines for its already discovered gas fields that are not being utilised.
The prime question is the implementation of the amended Article 172 of the Constitution, which gives 50 percent ownership of the oil and gas resources situated within a province and territorial waters, to the respective provinces.
A corporate authority has to be created by a law passed by the Sindh Assembly to create such an authority in the province with 50 percent representation on the board to representatives nominated by the federal government. This authority will basically be a development company responsible for exploration, production and sale of gas and oil to distribution companies. The oil and gas ministry created in the province should monitor the existing agreements with foreign companies and give new leases in consultation with the federal petroleum ministry.
Any cess or tax levied on consumers in Sindh by the federal or provincial government will also be shared 50 percent by the provincial government.
“It is obvious that our provinces can straightaway claim 50 percent of the newly-enacted cess collected in Sindh and use it for infrastructure development.”
The gas distribution companies notified scheduled for the act will collect a cess from the major consumers notified in the second schedule of the act and deposit it with the federal government.
The cess shall be utilised for or in connection with infrastructure development of Iran-Pakistan pipeline project, Turkmenistan-Afghanistan-Pakistan-India gas pipeline project, liquefied natural gas plants, or for price equalisation of other imported alternative fuel including liquefied petroleum gas.
Insiders told Pakistan Today that after receiving the summary on such an important matter, the Sindh Chief Minister Qaim Ali Shah has convened a detailed meeting. However, the date for the meeting to review the issue and write to the federal government has not been fixed.
