News
Wednesday, December 21, 2011
Govt readies gas bomb for New Year* Two taxes levied to collect Rs 57bn
* LPG price set to go up by Rs 12-14 per kg, CNG by Rs 5 per kg
* Apart from two taxes, govt decides to increase gas tariff by 14%
By Zeeshan Javaid
ISLAMABAD: While a wave of ongoing unrest against severe gas load shedding across the country continues, the Ministry of Petroleum and Natural Resources on Tuesday issued a notification of record hike in gas tariff from January 1 in the name of Infrastructure Development Cess (IDC) and Petroleum Levy to collect the accumulated revenue of Rs 57 billion.
A ministry official, Irfan Qazi, told Daily Times that the ministry announced the implementation of Petroleum Levy (Amendment) Bill 2011 and Infrastructure Development Cess Bill 2011 after signing of these bills by President Asif Ali Zardari.
Sources revealed that after implementation of Petroleum Levy (Amendment) Bill 2011, Rs 12 to 14 would be charge against the price of per kilogramme Liquefied Petroleum Gas (LPG) determined by Oil and Gas Regulatory Authority (OGRA).
While in case of implementation of Infrastructure Development Cess (IDC) from New- Year 2012, Rs 5 per kg would be added in per kg price of Condensed Natural Gas (CNG), Rs.197 per MMBTU in tariff determined for fertiliser plants, Rs 13 for industrial sector, Rs 27 per MMBTU would be additionally charged from the thermal power plants under possession of the Water and Power Development Authority (WAPDA) and Karachi Electric Supply Company (KESC).
On the other hand, leading to implementation of IDC money bill, Independent Power Producers (IPPs) would pay additional Rs 70 per MMBTU for gas used to generate electricity.
Interestingly, besides the implementation of above-mentioned two money bills, the federal government has also decided to increase the gas tariff by up to 14 percent from January 2012 for entire volume of gas consumers across the country.
After implementation of IDC bill, gas tariff of CNG filling stations would increase to Rs 141 per MMBTU in the region-1 Khyber Pakhtunkhwa, Balochistan, Potohar, Rawalpindi, Islamabad and Gujjar Khan, and Rs 79 per MMBTU for CNG filling stations in region-2, including Sindh and Punjab.
The Ministry of Petroleum and Natural Resources claimed that after implementation of these two money bills, federal government would be able to generate Rs 57 billion per year.
The federal government has planned to make legislation to meet the expenditures and project costs for gas import projects including Iran Pakistan (IP) Pipelines Project, Turkmenistan Afghanistan Pakistan India (TAPI) Pipeline Project, LNG import and LPG supply enhancement projects.
Federal Minister for Petroleum and Natural Resources Dr Asim Hussain laid the Petroleum Products (Petroleum Levy) (Amendment) Bill, 2011 and Gas Infrastructure Development Cess Bill, 2011 in the Senate on October 27.
According to initial homework over the respective money bills, the ministry was of the view that the federal government would be able to generate around Rs 40 billion, some Rs 13 billion from gas development cess and Rs 27 billion from petroleum levy.
Sources maintained that estimated gap between demand and supply is projected to increase from 1.6 bcfd in 2011-12 to over 2.5 bcfd in 2014-15. The IP pipeline project would bring in 750-mmcfd gas, first gas flow of which is expected in 2014. The IP project involves construction of 781 kilometres gas pipeline from Iran-Pakistan border to Nawabshah to inject gas into transmission system of the two gas utility companies. The estimated cost of the project is approximately Rs 108 billion.
The TAPI pipeline project would bring in 1,325-mmcfd gas – the first gas flow of which is expected in 2016. The project involves construction of 1,680 kilometres gas pipeline from Afghanistan-Pakistan border to Multan to inject the gas into transmission system of the two gas utility companies and onward to Pakistan India border.
OGRA has already made capacity allocations to import 1.4 Billion Cubic Feet Per Day (BCFD) of LNG to three companies with first delivery expected by the mid of 2012.
Courtesy www.dailytimes.com.pk