CNG sector suffered Rs 78 billion loss in 31/2 years due to pricing issues: Senate body told
A Pakistan parliamentary committee was informed that the CNG sector had faced a loss of Rs 78 billion during past three and a half years due to pricing issues and gas suspension. Briefing the Senate Sub-Committee here on Thursday the representatives of the All Pakistan CNG Association (APCNGA) appealed to the committee to ensure third party audit of their claims regarding the extra tax collection from the CNG sector.
The Senate body met here under the chairmanship of Senator Shahi Syed and was attended by other members, including Kalsoom Parveen and Mir Muhammad Yousaf Badin. The committee discussed the issue pertaining to charging 17 to 34 percent GST from CNG stations. The committee was further informed that CNG stations in Punjab which recently have become operational with the supply of Liquefied Natural Gas (LNG) are paying five percent General Sales Tax, while the CNG outlets in other provinces being operated on local gas are paying 17 percent.
The Sui Northern Gas Pipeline Limited (SNGPL) official informed the committee that sales tax is being collected from CNG station owners following the order of the FBR and OGRA. SNGPL official further said that they are providing LNG to the Punjab while to other provinces natural gas is being supplied. Natural gas is cheaper while LNG is expensive and this is the reason that five percent GST is being levied as per approved policy.
Chairman of the Sub-Committee noted that double tax collection was being made from CNG sector that has caused billions of rupees loss to the sector.
While terming the double taxation on the CNG sector a total injustice which has caused decline to the sector. The Committee directed the Ministry of Petroleum to hold meeting with All Pakistan CNG Association to address their problems. It was decided that the sub-committee would give its recommendation to the Standing Committee on the issue of double taxation. The Chairman Oil and Gas Regulatory Authority (OGRA) also termed double taxation of CNG sector was illegal. Giving briefing on CNG prices and sales tax, officials of the OGRA said that for Zone-I the price of CNG is Rs 35.17, while the OGRA is charging Rs 13.24 per kilo Development Cess, Rs 6 per kilo is electricity cost, operating cost and margin is Rs 12, while General Sales Tax is Rs 11. They said that the authority has notified Rs 75.82 against per kg CNG gas for Zone-1.Regarding Zone-II it was informed that the price is Rs 67.50 per Kg. They said there was no exercise of double tax collection from the CNG sector. The OGRA officials also rejected the report regarding 50 percent gas price hike from January 1, 2016 by the OGRA and said there was no such advice by the federal government. They informed that the authority would determine the average price of LNG gas after evaluation of the number of ships in a month in accordance with prescribed formula.
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