ISLAMABAD: The Late Payment Surcharge (LPS) on Gas Development Surcharge (GDS) owed by power companies to gas utilities, including PPL, MPCL, and SNGPL, has surged to an alarming Rs76.4 billion, according to a report by the Directorate General of Gas (Petroleum Division).
The Gas Development Surcharge, governed by the Natural Gas (Development Surcharge) Ordinance, 1967, represents the margin between the sale price and the prescribed price of natural gas. Proceeds from GDS are distributed among provinces under the NFC Award. However, delays in payments by power producers, including WAPDA, GENCO-II, and others, have resulted in significant LPS accumulation.
Key figures reveal Rs21.144 billion and Rs4.416 billion are owed to MPCL by GENCO-II and Foundation Power Company, respectively, while Rs50.736 billion is outstanding to PPL from GENCO-II. Additionally, SNGPL is owed Rs103 million by WAPDA’s Guddu thermal power plant.
The delayed payments have triggered LPS rates of 15-20% annually, causing further financial strain. Repeated audit observations on the LPS issue remain unresolved, despite directives from the Public Accounts Committee (PAC) for its settlement.
Recent meetings co-chaired by the secretaries of Petroleum and Power Divisions facilitated reconciliation exercises between gas suppliers and power purchasers, acknowledging overdue payments. The Directorate General of Gas has suggested revisiting an ECC decision from 2001, allowing WAPDA to clear outstanding liabilities by adding a 7.5% rate to current bills, as a potential resolution.
Story by Mushtaq Ghumman
