Stumbling block: Finance department delays release of oil, gas royalty

No money has been released to Karak, Hangu and Kohat in FY 2015-16

PESHAWAR: The last financial year crisis faced by the Khyber-Pakhtunkhwa government not only affected the development schemes in the province but also led to the finance department withholding the oil and gas royalty payments to the districts.

Officials in the finance department informed that the department had stopped releasing funds to oil and gas producing districts Karak, Hangu and Kohat.

Not a single rupee has been released to these districts in the fiscal year 2015-16. The K-P government transfers 10% share of the receipts on account of oil and gas receivable from the federal government to the districts where the wellheads are located.

The K-P government’s committee headed by the chief secretary had decided that the 10% share of royalty on oil and gas will be utilised on electricity, education, water and gas supply schemes, roads, health facilities, small dams construction and purchase of land for higher educational institutions and the minimum size of the scheme sponsored from the royalty money would be Rs1 million.

Since the finance department did not transfer the 10% royalty share to the districts it was affecting the ongoing schemes being sponsored through the money in districts.

Pakistan Tehreek-e-Insaf lawmaker Amjad Afridi had raised the issue in the K-P Assembly during the last session, saying that the finance department was not making releases to the districts and this is affecting work on the development schemes.

Afridi did not get the podium to express his reservations, however, Jamiat-e-Ulema-e-Islam-Fazl (JUI-F) lawmaker from Hangu Mufti Said Janan asked the speaker to convene a meeting of the lawmakers hailing from the oil and gas generating district with the government officials dealing the subject and the representatives of oil and gas extracting companies working in the province to clear their reservations.

The speaker approved his advice and called for a meeting on the subject. When contacted, PTI lawmaker Gul Sahib Khan said that the finance has recently released a portion of the royalty but it completely blocked the money in the previous year which affected progress.

The finance department officials dealing the subject blamed the financial crunch faced by the province last fiscal year for the blockade of the money.

“We have released Rs576.42 billion to the three districts this year,” said a senior official of the finance department told The Express Tribune.

“The districts’ share in the royalty money has reached to Rs7 billion and we had no funds to release last year so withheld the releases.”

According to the figures provided by the finance department, Rs420.16 million have been released for Karak, Rs86.99 million for Hangu district and Rs69.2 million for Kohat.

The department received over Rs23 billion from the federal government in royalty of oil and gas between 2015 and 2016 and the district share was Rs2.3 billion which was not released.

The government recovered Rs22.7 billion from the federal government between 2014 and 2015 and it released Rs3.1 billion to the districts in their share.

Published in The Express Tribune, September 4^th, 2016.