K-P voices concern over unpaid windfall levy
Exchange Companies Association president anticipated that the rupee would partially recoup losses over the next couple of days on expectations of easing political tensions. Photo: afp
Advisor to Khyber-Pakhtunkhwa (K-P) Caretaker Chief Minister on Finance, Energy & Power, Himayatullah Khan, has brought forth a significant concern regarding the exclusion of the Windfall Levy Clause from the TAL Block Supplemental Agreement.
In a letter addressed to the federal State Minister of Petroleum, Musadiq Malik, Himayatullah Khan has requested an inquiry against government officials involved in this matter.
According to the letter, the omission of the Windfall Levy on the oil clause from the Supplemental Agreement has resulted in substantial financial losses amounting to billions of rupees for both the federal and the government of K-P.
The TAL Block was awarded to various companies under the 1997 petroleum policy, and these companies, including MOL, PPL, POL, OGDCL, and GHPL, later applied for conversion to Petroleum Policy 2012 through the Supplemental Agreement executed on 28 Aug 2015.
Contrary to the provisions of Petroleum Policy 2012, the Windfall Levy on oil clause was not included in the Supplemental Agreement.
In an attempt to rectify this omission, the provincial government requested the federal government to move a CCI Summary. Consequently, the petroleum division issued a ‘notification’ on 27 Dec 2017, declaring that the clause pertaining to Windfall Levy on oil was to be considered a part of the executed Supplemental Agreements, the letter reads.
However, MOL and its Partners (PPL, POL, OGDCL & GHPL) challenged this notification by filing writ petitions in the Islamabad High Court in early 2018.
As a result, the case has been pending in the IHC, causing substantial financial losses to both the federal and government of K-P, it states. In light of these concerns, Himayatullah Khan has recommended the formation of an inquiry/investigation committee to probe the involvement of officials in this alleged illegality and to take strict actions against them.
The letter also suggests that public sector companies (OGDCL, GHPL & PPL) should be directed to withdraw their writ petition from the Islamabad High Court and pay the Windfall Levy on oil to the federal as well as provincial government as required by the policy.
Published in The Express Tribune, July 28th, 2023.