- President promulgates GIDC Ordinance to collect gas cess for gas distribution infrastructure and import of gas and LNG through IP and TAPI
- Following SC’s refusal to give legal cover to cess collection, petroleum secy says if SC dismissed review petition, approval will be sought from Parliament through money bill
- Govt has collected about Rs 84b from consumers under GIDC since 2011
On the prime minister’s advice, President Mamnoon Hussain has signed Gas Infrastructure Development Cess (GIDC) Ordinance, 2014 to provide a legal cover to gas cess collection for infrastructural development.
The ordinance will enable the government to continue collecting the gas infrastructure development cess (GIDC) from the consumers after the Supreme Court had refused to give a legal cover to the cess collection, saying it was a fee not a tax and it could not be levied through a money bill.
The government has collected almost Rs 84 billion from consumers under the head of GIDC since 2011. The amount collected under GIDC is meant to be used on the gas lines and gas distribution infrastructure to be laid down in future particularly for the import of gas and LNG through the Iran-Pakistan (IP) and Turkmenistan, Afghanistan, Pakistan and India (TAPI).
Ministry of Petroleum has also filed a review petition against the decision of Supreme Court that disallowed the government to collect GIDC from gas consumers.
COLLECTING TAX, COME WHAT MAY:
Petroleum Secretary Abid Saeed said that government had decided to issue an ordinance to continue collection of GIDC from gas consumers. He said that if court dismissed the review petition, the approval of cess would be sought from Parliament through money bill.
Petroleum Minister Shahid Khaqan Abbasi earlier said that Finance Ministry had kept this money under the head of GIDC and was provided on cash call. He said a pipeline to transport LNG would be laid from Karachi to North at cost of Rs 100 billion to enhance the pipeline capacity. Current system can transport 280 mmcfd LNG.
The minister said that SNGPL was facing 4 percent gas theft that amounts to Rs 10 billion and 2.5 percent of it was in the area of Karak, Khyber Pakhtunkhwa (KP).
“We have planned to launch Rs 8 billion project on cost sharing basis with province of KP to legalise gas connections in this area,” he said adding that KP had agreed to share cost but the plan was not implemented yet.
Khaqan Abbasi said a summary was being moved to the Economic Coordination Committee of the cabinet for laying an LNG pipeline from Gwadar to Nawabshah in Sindh (about 710 kilometres) as an alternative plan. This will leave about 70km of pipeline segment between Gwadar and the Iranian border, which can be constructed immediately whenever international sanctions on Iran are lifted.
