Sindh’s Cess dispute sparks fuel crises fears in Pakistan

KARACHI: The tax dispute between the Sindh government and oil companies has raised fears of a fuel crisis in the country.

After the Sindh government suddenly reinstated the 100 percent bank guarantee requirement under the Infrastructure Development Cess (cess), petroleum cargoes are stuck at ports, leading to fears of a fuel crisis in the country.

According to the correspondent, the development cess was imposed by the Sindh government in 1994, against which the petroleum companies went to the High Court and then the Supreme Court, on which the Supreme Court ruled in favor of the Sindh government. After the court’s decision, the Sindh government has decided to impose the cess.

The correspondent further said that under the mechanism that was going on between the petroleum companies and the Sindh government in this regard, the companies used to accept cargoes of finished products and in return, an undertaking was given to the Sindh government for payment.

However, now the companies are not paying the cess, on which the Sindh government has decided that until the cess is paid, there will be no clearance on the basis of undertaking, so now a 100 percent bank guarantee will have to be given for it.

On the other hand, the companies have raised their hands in this regard and have requested the federal government to intervene.

The companies are of the view that under the pricing mechanism, Sindh’s cess should be included in the pricing, we will not bear its burden, while old arrears should also be included in it.