Viable gas projects: Govt urged to amend GIDC Act to allow Rs350bn reallocation

ISLAMABAD: A parliamentary panel has urged the government to amend the Gas Infrastructure Development Cess (GIDC) Act to allow for the reallocation of Rs 350 billion for other viable gas projects.

These funds were originally earmarked for the Iran-Pakistan (IP), Turkmenistan-Afghanistan-Pakistan-India (TAPI), gas pipeline projects, Pakistan Stream Gas Pipeline Project which are currently stalled due to geopolitical issues and sanctions.

The Public Accounts Committee (PAC) meeting was held under Chairman Junaid Akbar to examine Audit Report of Petroleum Division for year 2023-24.

During audit of fiscal year 2022-23, it was observed that Petroleum Division collected GIDC amounting to Rs 354 billion up to June 30, 2023. However, federal government could only utilise Rs 3.3 billion on operational cost of Inter State Gas System (ISGCL) and repayment of its loan to GHPL. Those funds were to be utilised on TAPI, IP and Pakistan Stream Gas Pipeline Project. However, progress on these mega gas infrastructure development projects was very slow and no significant headway could be made resulting in non-utilisation of GIDC funds of Rs 350 billion.

Petroleum Division was of the view that the expenditure on capital intensive project to be funded from GIDC could not be taken further unless geo-political landscape changed and the sanction regime was done away.

Audit contended that the order of Supreme Court of Pakistan on August 13, 2020 could not be complied with by the Petroleum Division.

Member Committee Syed Naveed Qamar suggested the Petroleum Division to take up a summary regarding utilisation of GIDC to Cabinet or other competent forum for reappropriating the fund for other gas development projects. Other members of the committee also endorsed the view point of Naveed Qamar.

Earlier, Secretary Petroleum Momin Agha said that Pakistan and Iran are trying to develop mechanism for dispute resolution. Progress on TAPI project is also slow, he added.

The committee was further apprised that M/s Cnergyico Pak Limited failed to retire Rs 70 billion under head of petroleum levy. The company had short paid PL of amount Rs47 billion for period 2019-2023. The Finance Division has calculated Rs21 billion late payment surcharge (LPS).

The committee was told that Byco, which defaulted on its obligations, subsequently changed its name. The secretary of the Petroleum Division confirmed that Byco now operates under the name Cnergyico, and offered to pay rupees one billion annually to settle its outstanding dues. The company also obtained stay order from Sindh High Court against Rs21 billion LPS, he added.

Copyright Business Recorder, 2025