ISLAMABAD -  Federal Minister for Petroleum and Natural Resources Khaqan Abbasi has informed a parliamentary committee that the industries are not legally allowed to generate electricity with gas.

The Senate Special Committee, tasked to monitor the implementation of Gas Infrastructure Development Cess (GIDC), has directed the government to recover the GIDC from the companies who have collected the amount from the consumers. However, no recovery should be made from those entities that have not yet collected the Cess.

The Senate Special Committee, chaired by Ilyas Ahmad Bilour, also permitted Ministry of Petroleum and Natural Resources to prepare a draft mechanism to settle down the GIDC collection and payment issues. The committee directed the Ministry of Petroleum to evolve a mechanism in consultation with FBR, SECP and other organisations concerned to determine which entity had collected the GIDC from their consumers but did not deposit in the national kitty.

Representatives of All Pakistan Textile Mills Association (APTMA) have informed committee that Rs100 cess is being charged from the industries while Rs200 is being charged from the Captive power plants. The representative demanded an end for the discriminatory cess regime to various entities. The ministry replied that they don’t have the power to change the cess rates and only Finance Ministry has the power to determine it. “We are just collecting the Cess and depositing it to the national kitty,” he added. Replying the APTMA demand, Senator Usman Saifullah said that Captive power plants should be banned from generating power.

The petroleum minister informed the committee that industries are not legally allowed to use gas for the electricity generation. Khaqan further said that the ministry could provide a draft mechanism to determine that which entities had collected the GIDC from their consumers but did not deposit it. The formula would also categorise and identify the entities consuming natural gas for commercial purpose, who had collected the GIDC and accordingly paid and those who even did not charge but paid to the government.

He said that an internal committee of the ministry would draft the formula and submit before the Special Committee for further consideration. Chairman Bilour asked the minister to share the draft with the committee members prior to submitting before the body on January 31.

On the issue of outstanding amount of GIDC from the Compressed Natural Gas (CNG) stations, Khaqan said that the government was in negotiation with CNG sector to resolve the settle the matter. However, he said that the government cannot waive of the cess as parliament is the only authorised forum to decide about the settlement of outstanding GIDC.

He said the CNG stations had collected the GIDC as per notified tariff of Oil and Gas Regulatory Authority (OGRA), but did not pay to the government. The CNG sector has collected around Rs42 billion from their consumers and deposited only Rs13 billion. The amount of Rs29 billion along with the Late Payment Surcharge (LPS) of Rs11 billion were still outstanding against the CNG sector.

Representatives of All Pakistan CNG Association (APCNGA) informed the committee that they held meetings with officials of the Ministry of Petroleum and Finance and offered to pay Rs9 billion to settle the GIDC payment issue.

Regarding the issue of settlement with CNG sector, Senator Talha Mehmood said there should be no settlement with those who had collected the GIDC but haven’t paid it to the government. He informed that he had reports that the CNG association had collected Rs200,000 to Rs400,000 from their each member for illicit use in settlement of the outstanding amount. He recommended that the committee should not play any role in the settlement as there was involvement of billions of rupees. Other committee members also endorsed Mehmood’s point of view. The representatives of APCNGA rejected the allegation and left the meeting in protest.

The meeting was attended by Lt Gen (Retd) Abdul Qayyum, Saleem Mandviwala, Osman Saifullah Khan, Mohsin Aziz, Muhammad Talha Memhood, Muhammad Usman Khan Kakar, Ministry of Petroleum secretary and OGRA chairperson.