ISLAMABAD: The Senate Standing Committee on Petroleum on Thursday approved an amendment to Gas Infrastructure Development Cess (GIDC) law to enable the government recover about Rs12 billion arrears from CNG stations through an amicable resolution of a long-standing dispute.

Under the agreement, the Compressed Natural Gas (CNG) station owners had been given a waiver of Rs7bn on the condition that they would deposit Rs12bn in two equal instalments within three months after the GIDC (Amendment) Bill 2018 is passed by the parliament.

The committee elected PTI Senator Mohsin Aziz from Khyber Pakhtunkhwa as chairman of the committee who then presided over the meeting and briefed the members about the background of the bill. The panel was informed that CNG stations were collecting GIDC from consumers under GIDC Act of 2015 through sale price of CNG notified by the Oil and Gas Regulatory Authority (Ogra).

However, they were not passing on amounts so collected from consumers to the Sui Northern Gas Pipelines Ltd (SNGPL) and Sui Southern Gas Company Ltd (SSGCL) for its onward payment to the federal government on account of court stay orders.

Finally, the CNG station owners reached an out-of-the-court settlement with the government to “pay approximately half of the cess payable pertaining to the period from Jan 2, 2012 to May 22, 2015 amounting to Rs12bn”, the committee was informed. The two sides also agreed to have an amendment to the 2015 GIDC law through GIDC (Amendment) Bill 2018 to effectuate the out of court settlement.

The committee, however, deleted a provision in the amendment that said the government to prescribe a mechanism to assign collection of cess through the federal board of revenue or any other institution, saying the mechanism was unnecessary when the CNG stations had collected the amount from consumers and were ready to deposit it to the two gas companies in two instalments themselves.

The amounts shall be recovered in two tranches, first within one month and second within three months from commencement of the Amendment Act 2018. However, the CNG owners who fail to enter into an agreement with SSGCL and SNGPL within 30 days of the commencement of the act shall not be entitled to the discounted dispensation and would be dealt with separately under the law as defaulters.

As such, the CNG owners would now pay only Rs12bn instead of an outstanding amount of Rs19bn. The petroleum ministry had previously told the senate panel that CNG sector had collected around Rs42bn from their consumers and deposited only Rs13bn, leaving an outstanding bill of Rs29bn including Late Payment Surcharge (LPS) of about Rs11bn.

Under the agreement, however, the LPS was waived along with another Rs7bn discount in the interest of ending the court cases.

The committee was attended was attended by Senators Shamim Afridi, Fida Muhammad Khan, Mir Kabeer Ahmed Muhammad Shahi, Dr. Jahanzeb Jamaldini and Bahramand.

Published in Dawn, May 11th, 2018