Government aiming to obtain Rs300 billion from oil and gas companies

Government aiming to obtain Rs300 billion from oil and gas companies

Friday, June 1, 2012: The Government of Pakistan is expecting to obtain Rs300 billion from oil and gas companies in the next financial year 2012-13. This amount, however, does not include the general sales tax.

Commendable sources have said that out of the Rs300 billion, Rs102 billion was likely to be collected in shape of gas infrastructure development cess on natural gas, Rs120 billion as petroleum levy on oil products, Rs45 billion
as royalty on gas and crude oil and Rs30.8 billion as gas development surcharge on natural gas.

The infrastructure cess, levied with the objective of financing gas pipelines including Iran-Pakistan and Turkmenistan-Afghanistan-Pakistan-India projects, will be one of the major sources of revenue for the government with an
increase in its rate in the next financial year, starting July. In the current year, the government has estimated to collect Rs40 billion in this head.

According to a plan, the government is considering enhancing the cess rate to Rs300 per million British thermal unit (mmbtu) for fertiliser industry, to Rs300 per mmbtu for CNG stations in region-I and Rs200 per mmbtu for CNG stations
in region-II.

There is also a plan to enforce a uniform cess rate for power generation companies, independent power producers (IPPs) and industry at Rs100 per mmbtu in the next financial year.

At present, the cess rate is Rs197 per mmbtu for fertiliser industry, Rs147 per mmbtu for CNG stations in region-I, Rs79 per mmbtu for CNG stations in region-II, Rs27 per mmbtu for gas used by power generation companies, Rs70 per
mmbtu for IPPs and Rs13 per mmbtu for the industry.

According to the sources, the government did not receive an encouraging response from international lenders including Russia and China to requests for financing the Iran-Pakistan gas pipeline projects due to sanctions imposed by
the US against Tehran. “This prompts the government to generate funds through enhancing the cess on natural gas to fund the IP gas pipeline,” a government official said.

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Posted by Wajahat Javed on Jun 2 2012. Filed under Business, Pakistan. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry