ISLAMABAD

The federal government has backtracked from its early commitment of giving 50 percent of windfall levy on oil and gas (share) to the provinces and quite astonishingly, now it is not ready even to discuss the matter with the provincial representatives.

Official sources told The Nation that the Federal government has to pay billion of rupees per year to the provinces under the head of Windfall levy on oil and gas, with Sindh the biggest receiver of Windfall levy on gas, with almost 70 percent share of gas, while KP, with almost 50 percent share in national oil pool, will receive the biggest share in Windfall levy on oil, Punjab and Balochistan will receive their share according to their share of oil and gas production.

In the petroleum policy 2012, the base price of crude oil and condensate for Windfall Levy has been increased from $30/barrel to$40/barrel; which will escalate each calendar year by $0.5/barrel. Gas pricing Ceiling of $100/barrel replaced with $110/barrel; 5pc carried interest (Government Holding 21/2pc, Provincial Government Holding 21/2pc).

According the 2012 petroleum policy Windfall Levy will be equally shared between Federal Government and Provincial Government. The windfall levy is the difference between the International crude oil prices and the prices allowed to the E&P companies under petroleum policy 2012, which according to the sources runs in billion per year.

After the persuasion of the provinces of Punjab, Sindh, Khyber Pukhtunkhwa and Balochistan the Federal government has showed its readiness to give the provinces their share and also provided them the details about the levy collected. For the last one year the Federal government is not even ready to discuss the matter with provinces, the source maintained.

Punjab government via letter SO(P)ED/21-108/2013(P-III), Sindh via F.40/SO(O&G)/288/2014, KP via SOP(E&P)/I-58/2014 and Balochistan via PF.ED/SO(O&G) 1-7/13/174-7 had asked the government to furnish them with the required information of windfall levy collection and also about their shares in the joint pool.

In response to the provinces demand the Ministry of Petroleum and Natural Resources on June 9th 2014 provided them with the yearly collection of windfall levy which was billion of rupees, the sources informed. The Provincial Energy Departments were asked to make further correspondence with Directorate General of Oil for obtaining province wise bifurcation accrual/ collection of windfall levy.

“The petroleum policy 2012 was written and promulgated by the federal government, but when it’s come to the provinces right of the provinces then the authorities are not ready for its implementation” the source maintained.