Supply to fertilizer plants: Ministry seeks Rs1.096bn LPS for payment to SNGPL

ISLAMABAD: The Ministry of Industries and Production (MoI&P) has sought Late Payment Surcharge (LPS) of Rs 1.096 billion, to be paid to Sui Northern Gas Pipelines Limited (SNGPL) against supply of gas to fertilizer plants.

Sharing the details, sources revealed that Ministry of Industries and Production submitted a summary with the proposal that Late Payment Surcharge may be waived off between the period - September 2018 to November 2019.

While considering the summary, ECC of the Cabinet, in its decision of March 17, 2021 directed to resubmit the case after recalculation of actual incurred/financial cost of SNGPL against the Late Payment Surcharge for the period between September 2018 to November 2019, in consultation with the Petroleum Division and submit it for consideration of the ECC.

SNGPL through Petroleum Division has provided the recalculation sheet of actual incurred/financial cost i.e. Rs 1.096 billion. The difference between previous claim, ie, Rs 1.517 billion and current calculation is Rs 421.00 million, which is the amount that has been reduced by SNGPL based on the actual rates charged by the banks on short-term borrowing during the period September, 2018 to November, 2019.

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The Ministry of Industries and Production has proposed that it may be allowed to pay Rs 1.096 billion LPS payment to SNGPL from the budget allocated for operationalisation of two Fertilizer plants in CFY 2021-22.

“If the requested payment is approved from the allocated budget, then M/o Industries and Production would require more funds for clearing SNGPL bills during the CFY 2021-22,” the sources maintained.

Both Ministry of Finance and Ministry Energy (Petroleum Division) have supported the proposal of making payment to SNGPL through the budgetary allocation of CFY 2021-22.

Copyright Business Recorder, 2021