OGRA reluctant to recover cess collected by CNG stations

Gas stations have collected billions, but have not deposited this with utilities.

ISLAMABAD: The Oil and Gas Regulatory Authority (Ogra) has distanced itself from the tricky issue of gas infrastructure development cess and refused to shoulder the responsibility of recovering the cess running into billions of rupees from compressed natural gas (CNG) station owners.

To the surprise of many, CNG stations are charging the cess from commuters, but they are not depositing the collected amount with gas distribution companies, which are not making any demand, officials say.

Gas companies are hesitant because of an order issued by the Islamabad High Court (IHC) on January 31 this year, restricting the government from collecting the cess.

The previous government had imposed the cess on gas consumers in a bid to raise adequate funds to finance the Iran-Pakistan gas pipeline project.

The government is confused how gas companies will be able to recover billions of rupees from the CNG stations if the IHC judgment is upheld by higher courts. According to the IHC, the cess already collected should be adjusted in future bills of CNG stations, which were the petitioners in the case.

Though gas companies have stopped demanding the tax, the CNG stations are still charging it from consumers, officials say.

The Ministry of Petroleum and Natural Resources has suggested to gas companies that if the consumers are paying the tax, the amount should be deposited with the public exchequer regardless of the outcome of the case pertaining to legality of the tax.

In region-I comprising Khyber-Pakhtunkhwa, Balochistan and Potohar region, CNG consumers are paying Rs13.25 per kg as cess and in region-II covering Sindh and Punjab they are paying Rs10.64 per kg.

According to documents, the petroleum ministry had asked Ogra to issue a directive to CNG stations to accurately account for the cess collected by them.

However, Ogra, in a letter sent to the ministry on April 18, argued that the imposition of cess, its collection, payment or any other matter fell in the purview of the petroleum ministry.

Stressing that it could not issue any order, Ogra suggested that the ministry could directly inform all concerned for necessary compliance.

In a recent letter to the Ministry of Law, the petroleum ministry said it had advised gas companies and Ogra that cess collection should be reflected in the bills issued by the utilities to the consumers of natural gas. Gas companies were also asked to add a note to their utility bills with respect to the cess reflecting that “presently (it was) subjected to a stay order/status quo issued by various courts.”

Published in The Express Tribune, May 4^th, 2013.

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