ISLAMABAD: The Petroleum Division has decided to seek clarification from the Ministry of Justice on the issue of the mismatch of billing interest between the Ordinance, GSA and PPA, which creates an obstacle to recovering the surcharge from Gas Development (GDS), informed sources said. company registrar.
The decision was taken during a meeting of the Permanent Reconciliation Committee (PRC) on the non-fulfillment of the Late Payment Surcharge (LPS)/ default interest on the non-fulfillment of the Late Payment Surcharge ( LPS)/ default interest on the payment of the Gas Development Surcharge.
The meeting was attended by the Chief Financial Officer – GHCL, Deputy Legal Division Counsel, Audit Manager – Petroleum & Natural Resources, General Manager (Gas), Deputy Manager (F&P) and Officer accountant (F&P).
The Managing Director (Gas) gave a brief history of the gas development surcharge under the Natural Gas (Development Surcharge) Order 1967. He further stated that the ongoing GDS and interest thereon is charged by gas suppliers to power stations, especially GENCO/Guddu power station.
New exploration, more gas production: PD invited to create a technical group
Chief Financial Officer (CFO) Genco Holding Company Limited (GHCL) disputed reconciling the amount of interest with Mari Petroleum Company Limited; however, this could not be done with Pakistan Petroleum Limited. He also said there was a discrepancy in the charging of interest in the Natural Gas (Development Supplement) Order and the relevant Gas Sales Agreement (GSA) with the gas supplier.
The Petroleum Division Secretary felt that the Natural Gas (Development Surcharge) Ordinance, being the law of the land, has an overriding effect on the GSA.
Summarizing the meeting, the following decisions were taken: (i) the gas supplier to provide updated figures on the GDS and its interest receivable from the electricity sector; (ii) the gas supplier will also provide a billing mechanism whereby the GDS and its interest is billed to the power companies and treatment of the amount received from the power plants against the bills with specific reference to GDS and the interest therein related; (iii) GHCL to provide updated figures of GDS and its interest payable to gas producers; (iv) the issue of mismatch of interests between the Order, the GSA and the PPA will be referred to the Legal Division for clarification and; (vi) it was also agreed that GHCL would propose a mechanism for payment of the undisputed amount of GDS and its interest before the next meeting of the Committee.
Copyright Business Recorder, 2022