KARACHI: The Sindh government has not yet received any response to several of its communications to the federal government asking it to withdraw unilateral decisions taken by the Economic Coordination Committee (ECC) on upward tariff adjustment of natural gas, according to sources.

In addition, the federal government has not even shared relevant information with the provincial government in a clear violation of Article 19-A of the Constitution which guaranteed access to information, said the sources on Friday.

Sindh Chief Minister Syed Qaim Ali Shah, according to sources close to the Sindh government, complained in one of his letters to Prime Minister Nawaz Sharif that the federal government had not consulted the Sindh government at any stage on the critical issue of upward tariff adjustment of natural gas which would have a negative impact on gas development surcharge (GDS) receipts causing a huge loss to the province.

It had been pointed out in the letters that the ECC issued policy guidelines to the Oil & Gas Regulatory Authority (OGRA) for upward price adjustment of natural gas for allegedly securing profitability of SSGCL & SNGPL from cost plus formula to crude oil based formula, said the sources.

Similarly, the ECC had also unilaterally dismantled gas price agreement with the Mari Petroleum Company Ltd and changed it from cost plus formula to crude oil based formula, said the sources quoting from the letters.

The Sindh government expressed serious reservations over the gas infrastructure development cess (GIDC) ordinance which was imposed without consultation with the provinces and said these matters squarely fell within the ambit of the Council of Common Interests (CCI) but were never placed before the council’s meeting.

As a result, Sindh, the largest producer of natural gas in the country, would lose in excess of 65 per cent of GDS share in short and long term, said the sources.

The Sindh government has, therefore, requested the federal government to withdraw the arbitrary ECC decisions of Nov 20, 2014, about issuance of policy guidelines to OGRA for readjustment of gas tariff and dismantling of gas price agreement with Mari Petroleum Co, provide relevant information to provincial governments, repeal GIDC Ordinance with retrospective effect, stop levy and collection of GIDC and transfer all amounts collected to date to the provinces in proportion to the production of natural gas from each province and present all oil and gas matters before the CCI for discussion, decision and agreement, according to the sources.

Published in Dawn, February 21st, 2015

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