Export-oriented industry rates: MoC opposes gas/RLNG supply to Ghani Glass
According to the details, in 2019, M/s Ghani Glass Ltd. filed a Writ Petition in the Lahore High Court and prayed that the concessionary gas/RLNG tariff-fixed at Rs. 600 per MMBTU granted to the zero-rated/export- oriented sectors, may be extended to the Petitioner, as well.
Petroleum Division, Oil and Gas Regulatory Authority (OGRA), Sui Northern Gas Pipeline Limited (SNGPL), and Federal Board of Revenue were the original respondents in the Writ Petition (Annex-I). Ministry of Finance and Ministry of Commerce were not impleaded as parties, in this case, until April 07, 2025.
The Lahore High Court, in its judgment of April 10, 2025, directed: (i) Ministry of Finance in coordination with the Ministry of Commerce and other relevant stakeholders to, within 90 days, place the case of M/s Ghani Glass Ltd. before the ECC of the Cabinet to develop a uniform policy ensuring that only export-oriented industry receive tariff concession rather than making sector-based classification that allow non-exporting industry to benefit unfairly;(ii) in case of placement of the Case, the ECC was directed to consider within 60 days, the request of the petitioner for grant of concessional tariff in respect of price of Sui Gas/RLNG with specific reference to the point of discrimination excluding glass from the export-oriented sectors;(iii) the relevant authority was also directed to look into charging concessionary tariff from the petitioner from the date of filing of the case (i.e., 2019) till the period the benefit was extended to five zero-rated/export-oriented sectors ; and (iv) ECC was directed to take into consideration the potential of glass industry to further increase export abroad to fetch maximum foreign exchange. Furthermore, the said forum was also tasked to determine whether it is feasible to charge high prices to any export-oriented industry as compared to the price prevalent in other countries.
According to Commerce Ministry, the Federal Board of Revenue in an SRO 1125(1)/2011, granted zero-rated sales tax status to the five key sectors: textiles (including jute), carpets, leather, sports goods, and surgical instruments.
In 2018, the Petroleum Division extended concessionary tariff on RLNG at PKR 600/MMBTU to the exporters of the same five zero-rated sectors. Following the withdrawal of SRO 1125(1)/2011 through the Finance Bill 2019, an administrative gap emerged regarding the continuation of concessionary gas tariffs. Ministry of Commerce, therefore, declared the erstwhile zero-rated sectors as 'Export-Oriented Sectors' through an OM of December 13, 2019.
Accordingly, concessionary gas tariffs continued till 2023 and were discontinued afterwards.
Commerce Ministry further stated that concessionary energy tariffs which were being granted to the five export-oriented sectors have been discontinued and are no longer available to any sector.
Tariff concessions were granted to those sectors whose share in Pakistan's total exports were significant in 2011, while share of the glass sector with an annual export $ 15.9 million was negligible.
Ministry of Commerce on the advice of Ministry of Law & Justice, filed aCivil Petition for Leave to Appeal (CPLA) on June 12, 2025 in the Supreme Courtof Pakistan and has contested the judgment of Lahore High Court.
Commerce Ministry was of the view, that the claim made by M/s Ghani Glass Limited for grant of tariff concessions on gas/RNLG is untenable and may not be entertained.
Copyright Business Recorder, 2025
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