Gas utilities of the country has stopped recovery of Gas Infrastructure Development Cess (GIDC) from the consumers after court orders but CNG consumers are so far deprived of said relief in commodity price as Petroleum Ministry has not advised Ogra in this regard.

Islamabad High Court (IHC) on 31-01-2013 in a decision on GIDC said, “Gas Infrastructure Development Cess Act, 2011 is declared Ultra Vires to the Constitution, void, an infringement to the fundamental rights, offensive to principles of fair play, equality, transparency, social justice, good governance and tantamount to exploitation. GIDC enactment is also besides the dictums laid down by the superior courts of the country. It is further declared that levy and collection of GIDC is illegal. Respondents are restrained from making demand of GIDC, and the amount already received on this account has to be adjusted in future bills of the petitioners.”

Since 11 days earlier Islamabad High Court (IHC) in a decision on collection of GIDC from the consumers had declared GIDC Act 2011 as illegal but no decrease in the prices of Compressed Natural Gas (CNG) made by the government to provide relief to the innocent consumers and they are being fleeced with same tax. Ministry of Petroleum & Natural Resources (MPNR) has so far not advised the Oil and Gas Regulatory Authority (Ogra) to take necessary steps to decrease the price with an aim to provide relief to consumers.

Around Rs80 billion has been collected from gas consumers under the GIDC. Sui Southern Gas Company Limited (SSGCL) and Sui Northern Gas Pipelines Limited (SNGPL) have stopped recovery of GIDC and it would not be included in the gas bills likely to be issued to the consumers within next couple of days. However, Ogra has now written a letter to the ministry requesting the government (Petroleum ministry) to issue advice on the matter as on 31-01-2013 Islamabad High Court in its order had also advised to adjust the amount already received on this account, sources said on Monday.

The Gas Infrastructure Development Cess was applicable on CNG, industrial sector, fertilizer and cement and power sectors. CNG consumers of Region-I comprising areas of Potohar, KP, Balochistan and Region-II including areas of Punjab and Sindh are at present bearing heavy brunt of GIDC. CNG consumers in Region-I are paying Rs15.37 where GIDC is Rs13.25/kg and GST is Rs2.12/kg, which is 16 per cent in the price while consumers of Region-II are paying GIDC as Rs10.64/kg where GIDC is Rs9.18/kg and GST is Rs1.46/kg in the price of the commodity.

Official sources in petroleum ministry told that as imposition of tax is a federal subject so it is the ministry who issues advice to the regulator to impose or vacate tax and Ogra itself has no powers in this very regard.