Gas cess for industries to be slashed by Rs50/mmbtu

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ISLAMABAD: The Adviser to Prime Minister Dr Asim Hussain has said the government will reduce Gas Infrastructure Development Cess (GIDC) for industrial sector by Rs 50 per mmbtu and in this regard a notification will be issued on September 10 (Monday), it is learnt.

“The Ministry of Petroleum will withdraw its previous notification of imposition of GIDC according to which the government on June 5 increased GIDC for industrial sector from Rs 13 per mmbtu to Rs 100,” Gohar Ijaz, former chairman Aptma told Business Recorder.

He said the government will issue a new notification according to which GIDC for industrial sector has been fixed at Rs 50 per mmbtu instead of Rs 100 per mmbtu.

According to a senior official of the Petroleum Ministry the industrial sector was requesting the government to reduce GIDC for long time, and on Friday the Aptma held final round of talks with high-ups of Petroleum Ministry, which agreed to reduce the cess and issued a new notification.

While welcoming the government move, Ijaz added that the industrialist were trying to convince the government to reduce GIDC for industrial sector to make Pakistani exports in the global market competitive, which at present are facing stiff competition in the global market as a result of serious energy crisis.

The revenue generated through GIDS on gas would be spent on the development of Turkmenistan-Afghanistan-Pakistan-India (TAPI), Iran-Pakistan gas pipeline projects as well as laying of Liquefied Natural Gas (LNG) pipeline from Karachi to Lahore.

Aptma has asked the government to utilize the revenue collected through GIDC on the import of LNG or any other project that could cater for industry’s energy needs, but at present it was not expecting that the government could start any of these projects immediately.

According to top petroleum ministry official, “If we are imposing Rs 1 gas development surcharge per mmbtu gas we will collect Rs 5 billion annually.”

On June 5, 2012 the government increased across the board GIDC for all the sectors, which made gas costlier by Rs 103 for fertilizer sector as the government enhanced GIDC from Rs197/mmbtu to Rs300/mmbtu. Similarly, the cess imposed on the industrial sector was increased from Rs 13/mmbtu to Rs 100/mmbtu.

 

Courtesy: Business Recorder


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