The federal government steamrollered all the dissent in the parliament and embarked upon another contentious piece of legislation with the connivance of pseudo opposition party PPP. Bereft of any sign of altruism, the PML-N government fortified anti-Punjab sentiment by imposing Gas Infrastructure Development Cess (GIDC) against the will of smaller provinces.

The chief ministers of Sindh and KP provinces have already deprecated the cess which is aimed at benefitting Punjab at the expense of other provinces. The controversial law was earlier levied by the PPP government in 2011 by enacting the GIDS Act 2011 with the objective to develop different projects, including the Iran Pakistan (IP) Gas Pipeline Project, Turkmenistan-Afghanistan-Pakistan-India (TAPI) Pipeline project, LNG import project and LPG supply enhancement projects. IP and TAPI projects require Rs500 billion for lying pipelines.

As a matter of principle, SNGPL and SSGC are companies and should take the responsibility to mobilise resources for new projects. Imposing indirect taxes on public to generate resources for commercial companies is a blatant transgression of corporate business principles. The law was challenged in the Peshawar High Court that declared the cess unconstitutional on June 13, 2013. Again in October 2014, the PHC stayed the recovery of the cess from several industrial units and CNG stations in Khyber Pakhtunkhwa. The restraint order was issued after preliminary hearing into 18 petitions against the GIDC recovery by the federal government.

The petitioners contended that except for Punjab, all the other three provinces were self-sufficient in production of natural gas and the entire infrastructure to import gas, LNG or LPG was to mainly bridge demand-supply gap of Punjab only and it would be cruel to inflict onerous burdens upon consumers of other provinces. However, the Islamabad High Court (IHC) later on decided in favour of an act of the parliament to impose a fee on natural gas for funding various gas projects in the country. Subsequently, the federal government tabled a fresh bill and rushed it through the lower and upper houses of the parliament.

The enactment process of the law is also in contravention with constitutional stipulations. The federal government has been undertaking oil and gas related business through an unconstitutional ministry of petroleum. Since the very subject is under the purview of the Council of Common Interest (CCI), no other entity has any mandate to take any decisions or running the business of its subjects.

One of the demands of the Sindh government was to debate all such matters at the forum of CCI. Like the decision on importing LNG, the decision on GIDC was also not brought before the CCI. Skirting the CCI on the matters where Punjab anticipates a bitter confrontation by other provinces is a blatant negation of constitution.

Since the PML-N enjoys a majority in the National Assembly and is able to garner the PPP’s support in the Senate, it suits the government to resort to enactment rather than sorting out the matter at the CCI forum. Dictators did not convene the CCI meetings and elected governments convene meetings for only selective agenda. In both cases the CCI which is a lynchpin of federation and democracy is rendered spineless.

The main opposition party PPP, whose provincial government in Sindh had been ferociously opposing the cess till recent past, succumbed to its leadership’s politics of reconciliation and paved the way for the passage of the bill. At one stage, the Sindh government claimed that since 2011 the federal government had collected an amount of Rs131 billion and the amount remained utilised because of the inordinate delay in the gas pipeline projects. As such the stashed amount was lying with the federal government and the same must be distributed among the provinces under Article 161 of the constitution. However, the top leadership bulldozed all the claims of its own party government in Sindh and the bill became a law without much effort.

All other major opposition parties in the house opposed the bill to the hilt but their numerical inferiority could not stop the law. The very move is being seen as yet another episode of Punjabisation of Pakistan. Senator Aitzaz Ahsan also berated the Nawaz league in the Senate. He lamented that the federal bureaucracy is engendered by officials from Punjab who paddle such decisions, which is breeding hatred among smaller provinces.

Khyber Pakhtunkhwa Chief Minister Pervez Khattak termed levy of GIDC on Khyber Pakhtunkhwa and other smaller province discriminatory, anti-business and unjustified. He said that GIDC is being imposed for the benefit of Punjab only as other provinces are self-sufficient in gas production. Why the gas consumers of other provinces should pay for the infrastructure to be built only for the Punjab province? KP contributes just 8 per cent of national gas production, yet its leadership voiced for the rights of its people whereas Sindh produces 70 per cent of national gas production but its people were betrayed by their elected leadership.

There is no iota of doubt that the cess is meant to benefit only one province. Article 158 of the constitution reads "the province in which a wellhead of natural gas is situated shall have precedence over other parts of Pakistan in meeting the requirements from the well-head." This article of the constitution makes three provinces self-sufficient in gas resources.

Except Punjab, no other province has gas deficit and as such they do not require any imported gas. This assertion can be corroborated from the official data of Pakistan Energy Year Book. The data shows that Sindh, Balochistan and KP contribute 68, 19 and 8.38 per cent of national gas production respectively. However, these provinces consume only 55, 30 and 51 per cent of their production. In a sharp contrast, Punjab consumes almost eight times more gas than its own production. Obviously, gas from three provinces is pumped to Punjab without getting any compensation.

Access to cheaper energy resources has enabled Punjab to fuel its sprawling industry and commerce that ultimately contributes towards augmenting the state of human development in the province. According to the data available on Oil and Gas Regulatory Authority’s website, Punjab has 2162 operational CNG stations compared to only 587 in Sindh.

According to the Pakistan Energy Year Book, Punjab has over 3.83 million domestic gas consumers compared to 2.31 million in Sindh. Punjab has 47,000 commercial consumers compared to only 23,000 in Sindh. Similarly, Punjab has 5700 industrial consumers compared to only 4000 in Sindh. Balochistan and KP have even lesser number of consumers in each category. This data shows that Punjab is an energy starved province and has been guzzling natural gas of the remaining three provinces in "greater national interest". Desperately, it resorts to import of an exorbitant liquefied natural gas from Qatar and imposes cess on developing new infrastructure to meet its energy needs. All such steps are taken by heaping burden on the people of other provinces who are constitutionally self-sufficient in gas resources.

Apart from political implications, the new cess has also riled business community. The CNG Association, All Pakistan Textile Mills Association and Islamabad Chamber of Commerce and Industry also vehemently opposed the cess, as it will spike the cost of production thus making Pakistani products further uncompetitive in the international market. The gas tariff for industries in Pakistan is $4.8 that will swell to $6.27 with the fresh levy. The tariff is disproportionally higher than $1.8 in Bangladesh, $3.66 in Sri Lanka and $4.66 in India. This will obviously render Pakistani products uncompetitive in the market.

The government was expecting to collect Rs120 billion on account of GIDC in the fiscal year 2013-14. An official of the Petroleum Ministry, talking to media, disclosed that the rate of GIDC was increased in January. The rate for industrial sector was doubled from Rs50 per Million British Thermal Unit (MMBTU) to Rs100 per MMBTU and for fertilizer sectors it was increased from Rs197 to Rs300 per MMBTU.

Increasing the cess on fertilizer sector ends up in directly impacting the agriculture sector, which is already plagued by market crisis and chicaneries of political leadership and bureaucracy. In the outgoing financial year, agriculture sector has underperformed and the targets of annual growth could not be met.

A flawed trade policy for agriculture commodities has caused staggering losses to growers in the current year. Increasing the cost of fertilizer through this cess would further shake farmers and ultimately confidence of the growers will be further eroded. This may annihilate the agriculture sector, which is the cornerstone of rural economy.

Akin to power sector, one major reason of gas crisis is poor infrastructure and shoddy management of gas distribution network. The current amount of conveyance losses is close to 12 per cent, which is three times the internationally permissible limit for a gas distribution system. Plugging such losses can save up to Rs50 billion. The SNGPL can generate remaining amount through open market bonds or commercial loans.

Rather than improving efficiency of the system by plugging losses, the government resorts to import pricey gas to bridge the ever widening gap of demand and supply. While inefficient bureaucracy of the gas sector enjoys complete impunity, ordinary citizens are subject to heavy taxes.