SBD-3
ELITE MEMBER
- Joined
- Sep 19, 2008
- Messages
- 15,120
- Reaction score
- -9
- Country
- Location
Sindh has got engaged in a row with the federal government as it has challenged all decisions pertaining to gas import and related taxes and is seeking to consume the natural gas produced in the province.
These issues were taken up in a meeting of the inter-provincial committee earlier in the week following protest by the Sindh government over neglecting the major gas-producing province in different oil and gas related issues. Sindh Finance Minister Murad Ali Shah represented the province in the meeting.
Sindh is the largest producer of gas, churning out about 70% of total production. If Article 158 of the Constitution is implemented, Punjab will be the major loser in gas consumption.
In the meeting, Shah aired concern over the import of liquefied natural gas (LNG). Officials aware of the developments said Petroleum Minister Shahid Khaqan Abbasi responded to the concerns by saying that Sindh could also import LNG to meet its needs. The LNG terminal built at Port Qasim had nothing to do with the Sindh government, he said.
On the issue of gas development surcharge (GDS) raised by the Sindh minister, Abbasi insisted that the province had been receiving the surcharge, which could be checked with Sui Southern Gas Company (SSGC). GDS is the difference between the determined price and actual collection.
The inter-provincial committee, constituted by the Council of Common Interests (CCI), will meet again on April 7 at the Ministry of Petroleum to address Sindh’s concerns.
The province has also challenged the imposition of gas infrastructure development cess (GIDC), which the Pakistan Peoples Party (PPP) introduced in its tenure to raise funds for financing gas import projects.
In a letter to Federal Minister for Inter-Provincial Coordination Riaz Hussain Pirzada on March 25, the Sindh finance minister drew the attention to the prime minister’s directive during the meeting of CCI held on March 18 for placing oil and gas matters before the CCI for a decision.
He said Sindh for the last over one year had been pointing to the oil and gas issues where the CCI’s authority was challenged either by the Economic Coordination Committee (ECC) or the Cabinet Committee on Energy.
Saying that provinces were not represented in these committees, Shah added neither the provincial government was consulted at any stage nor minutes of deliberations of the energy committee were shared. The national press was the only source of information, he said.
On the basis of news reports, the ministries concerned were asked to refer oil and gas related matters to the CCI as these might cause a huge GDS loss to the provincial purse.
The reasons of likely loss included provision of natural gas to Engro Fertilisers at a concessionary rate and the resultant loss in GDS, sale of Pakistan Petroleum shares, issuance of policy guidelines for gas tariff adjustment for Sui Northern Gas Pipelines (SNGPL) and SSGC, cancellation of the gas price agreement of Mari Gas Petroleum Company and promulgation of Gas Infrastructure Development Cess (GIDC) Ordinance 2014.
He said Sindh now intended to place some matters before the CCI for debate and decision. They include priority rights for the gas-producing province over utilisation of gas under Article 158, import of LNG and its utilisation, import of gas from Turkmenistan and its utilisation and collection of royalty on minerals, oil and natural gas by provinces.
The Power Generation Policy 2015 is currently being debated by the federal and provincial governments and the issues raised above are directly linked with it. “You are requested to expedite the placement of these issues before the CCI so that approval of the power generation policy is not delayed,” the letter said.
Published in The Express Tribune, April 5th, 2015.
Like Business on Facebook, follow @TribuneBiz on Twitter to stay informed and join in the conversation.
Conflict of interest: Sindh challenges decisions on gas import, taxes - The Express Tribune
These issues were taken up in a meeting of the inter-provincial committee earlier in the week following protest by the Sindh government over neglecting the major gas-producing province in different oil and gas related issues. Sindh Finance Minister Murad Ali Shah represented the province in the meeting.
Sindh is the largest producer of gas, churning out about 70% of total production. If Article 158 of the Constitution is implemented, Punjab will be the major loser in gas consumption.
In the meeting, Shah aired concern over the import of liquefied natural gas (LNG). Officials aware of the developments said Petroleum Minister Shahid Khaqan Abbasi responded to the concerns by saying that Sindh could also import LNG to meet its needs. The LNG terminal built at Port Qasim had nothing to do with the Sindh government, he said.
On the issue of gas development surcharge (GDS) raised by the Sindh minister, Abbasi insisted that the province had been receiving the surcharge, which could be checked with Sui Southern Gas Company (SSGC). GDS is the difference between the determined price and actual collection.
The inter-provincial committee, constituted by the Council of Common Interests (CCI), will meet again on April 7 at the Ministry of Petroleum to address Sindh’s concerns.
The province has also challenged the imposition of gas infrastructure development cess (GIDC), which the Pakistan Peoples Party (PPP) introduced in its tenure to raise funds for financing gas import projects.
In a letter to Federal Minister for Inter-Provincial Coordination Riaz Hussain Pirzada on March 25, the Sindh finance minister drew the attention to the prime minister’s directive during the meeting of CCI held on March 18 for placing oil and gas matters before the CCI for a decision.
He said Sindh for the last over one year had been pointing to the oil and gas issues where the CCI’s authority was challenged either by the Economic Coordination Committee (ECC) or the Cabinet Committee on Energy.
Saying that provinces were not represented in these committees, Shah added neither the provincial government was consulted at any stage nor minutes of deliberations of the energy committee were shared. The national press was the only source of information, he said.
On the basis of news reports, the ministries concerned were asked to refer oil and gas related matters to the CCI as these might cause a huge GDS loss to the provincial purse.
The reasons of likely loss included provision of natural gas to Engro Fertilisers at a concessionary rate and the resultant loss in GDS, sale of Pakistan Petroleum shares, issuance of policy guidelines for gas tariff adjustment for Sui Northern Gas Pipelines (SNGPL) and SSGC, cancellation of the gas price agreement of Mari Gas Petroleum Company and promulgation of Gas Infrastructure Development Cess (GIDC) Ordinance 2014.
He said Sindh now intended to place some matters before the CCI for debate and decision. They include priority rights for the gas-producing province over utilisation of gas under Article 158, import of LNG and its utilisation, import of gas from Turkmenistan and its utilisation and collection of royalty on minerals, oil and natural gas by provinces.
The Power Generation Policy 2015 is currently being debated by the federal and provincial governments and the issues raised above are directly linked with it. “You are requested to expedite the placement of these issues before the CCI so that approval of the power generation policy is not delayed,” the letter said.
Published in The Express Tribune, April 5th, 2015.
Like Business on Facebook, follow @TribuneBiz on Twitter to stay informed and join in the conversation.
Conflict of interest: Sindh challenges decisions on gas import, taxes - The Express Tribune
