ISLAMABAD: The Economic Coordination Committee (ECC) of the Cabinet has decided to impose 5 per cent GST on LNG import to bring Rs450b CNG industry out of crisis.
Federal Minister for Finance Senator Muhammad Ishaq Dar chaired the meeting of the ECC here at the Prime Minister’s Office and considered the proposal for exempting LNG import from Gas Infrastructure Development Cess (GIDC) and GST. The proposal was submitted by the Ministry of Petroleum and Natural Resources for exempting LNG import from GIDC and GST.
The Finance Minister said that the decision is taken with a view to facilitate the general public and encourage investment in the sector.
The ECC decided to slash the sales tax on LNG from 17 percent to five percent. The committee has also allowed the Ministry of Port and Shipping for purchase of tug boats for the export of LNG.
The ECC also considered and approved a proposal moved by the Cabinet Division for amendment in the OGRA Ordinance 2002 to establish prices of all refined oil products in the country after the Law Justice and Human Rights Division’s comment that the proposed draft bill was in order and recommended to place it before the CCI.
After the implementation, the availability of CNG to be made out of imported LNG at 30-35pc parity price with petrol, keeping the petrol price at Rs100 per litre and the price of CNG will be Rs65 per kg.
The official sources said that the CNG sector is reportedly going to ink a deal with Engro LNG terminal to import 200mmcfd LNG and 400mmcfd through other terminals being installed by other players under private arrangements. The Engro LNG terminal has a capacity to handle the import of 690mmcfd gas out of which the government wants to import 400mmcfd LNG while the remaining 200mmcfd will be imported by the CNG sector