How much GIDC will each company pay? As govt orders to initiate recovery

The Ministry of Energy (Petroleum Divison) in its letter dated 19th August 2020, has directed Sui Southern Gas Company, Sui Northern Gas Company, Pakistan Petroleum Limited, ODGCL, and Mari Gas Company Limited to initiate the recovery of arrear amounts accrued up to 31st July 2020 in 24 installments.

“There will be no LPS on the arrear amounts except where the consumer defaults in a payment of installment. Further the gas bills for the month of August 2020 and onwards will not include or reflect GIDC rates and will remain unbilled till further orders,” read the letter.

The development comes after the Supreme Court of Pakistan (SC) last week announced a landmark verdict, as the court-ordered companies pay Rs417 billion in the Gas Infrastructure Development Cess (GIDC) case.

As per the SC verdict, fertilizer sector( old plants) are to pay Rs 80.426 billion, fertilizer feed ( new) Rs67 billion, fertilizer fuel, Rs16.566 billion, general industry Rs46.327 billion, IPPs, Rs 9.132 billion, KE, Rs36.509 billion, Genco/ Wapda, Rs22.563 billion, captive power, Rs101.725 billion, CNG Region-I Rs41.655 billion and CNG, Region-II Rs35 billion.

These sectors collected Rs295.4 billion during the last ten years whereas the outstanding amount against them is Rs456.946 billion. The accrued amount of GIDC is Rs752.349 billion.

A three-member special bench, headed by Justice Mushir Alam and comprising Justice Faisal Arab and Justice Mansoor Ali Shah after hearing 107 petitions/appeals of various textile mills, cotton mills, sugar mills, ceramics companies, chemicals, CNG filling stations, match factories, cement companies and aluminum industries regarding GIDC levy for two weeks on February 20, 2020, reserved the judgment.

Company-wise, Fauji Fertilizer will be required to pay Rs63 billion, followed by Fauji Fertilizer Bin Qasim, Rs22 billion, Engro Fertilizer, Rs19 billion, and Fatima Fertilizer- Rs6 billion.

It is pertinent to mention that GIDC was imposed by the government back in Dec-2011 to raise funds for the development of gas infrastructure in the country. According to the GIDC Act, the collected amount shall be utilized by the Federal government for Iran Pakistan (IP) gas pipeline, Turkmenistan-Afghanistan-Pakistan-India (TAPI), LNG, and other ancillary projects.