Fertilizer industry pays 44 percent of GIDC but uses only 19 percent of gas

The National Assembly Standing Committee on Petroleum has deferred two government bills seeking changes to gas related charges after

Islamabad: The National Assembly Standing Committee on Petroleum has deferred two government bills seeking changes to gas related charges after concerns were raised over the impact on fertilizer companies, farmers and the wider energy sector.

The committee, chaired by Syed Mustafa Mehmood, deferred the Natural Gas Development Surcharge Amendment Bill 2026 and the Gas Infrastructure Development Cess Amendment Bill 2026.

The move came after a detailed discussion on the Gas Infrastructure Development Cess, commonly known as GIDC. The fertilizer industry told the committee that it contributes about 44 percent of the total GIDC collection while using about 19 percent of the country’s gas.

The Executive Director of the Fertilizer Manufacturers of Pakistan Advisory Council said fertilizer companies had already invested more than US $300 million from their own money in gas related infrastructure since the GIDC law was introduced. He said another investment of more than US $200 million was planned.

The industry argued that the proposed changes could increase its financial burden and eventually affect farmers. It said the original purpose of GIDC was to develop gas infrastructure, while the new bill would give a broader meaning to strategic gas infrastructure.

One committee member said money collected through GIDC should ultimately benefit farmers. He also said fertilizer prices should be shaped by demand and supply rather than unnecessary additional pressure on the industry.

The member also warned that international sanctions and the situation involving Iran and Afghanistan should be considered while making energy policies. He said similar cost concerns could later be raised by power companies if the government did not carefully examine the issue.

The member clearly said he was not in favour of the proposal made by the fertilizer industry representative, while other members supported his position.

The Petroleum Division told the committee that the main purpose of the proposed legislation was to bring more areas into the tax net.

The fertilizer industry offered another proposal, asking Parliament to allow verified investments made by GIDC paying fertilizer companies in gas infrastructure to be counted against their GIDC liability.

The committee also turned its attention to the Petroleum Training Fund and raised serious concerns over the accumulation and limited use of the money.

Members said the fund was created to help people, especially deserving students, young people and communities living in areas where petroleum is produced. They stressed that the money should produce visible benefits instead of remaining unused.

The committee ordered the Petroleum Division and the Directorate General Petroleum Concessions to prepare clear and transparent rules for spending the fund.

Members said the rules should explain who can receive assistance, how students and trainees will be selected, which areas will receive priority and which educational institutions and training providers will qualify.

They also demanded proper monitoring, audits and measurable results. The committee said the fund should focus on scholarships, quality education, professional training and useful skills that can help people find jobs.

Members warned against spending the money mainly on buildings or training centres without checking whether those projects actually improve education and employment.

The committee also called for regular monitoring reports every three or six months so that Parliament can see where the money is going and what results are being achieved.

Members suggested examining the experience of Corporate Social Responsibility funds to find better ways of making sure communities in petroleum producing areas receive the intended benefits.

The Directorate General Petroleum Concessions told the committee that revised guidelines for the Training Fund had already been prepared after considering earlier recommendations.

The company and officials were directed to consult provincial governments and other relevant stakeholders before the guidelines are finalised, with the committee making clear that the draft should be discussed properly with provincial representatives rather than simply sent to them for information.