Khyber Pakhtunkhwa has approached the Council of Common Interests (CCI), the federal-provincial forum that settles shared economic matters, seeking a natural gas price hike through a sharp rise in federal excise duty (FED), a tax collected at the gas well-head. Official documents show the province wants the duty lifted from Rs10 per million British thermal units (MMBTU), a standard energy unit, to Rs60 per MMBTU — a 500 percent increase.
Why KP wants the duty revised
A summary moved by the former PTI-led KP government to the CCI says the federal duty was last fixed at Rs10 per MMBTU in the Finance Act 2010, under Article 161(1)(a) of the Constitution. At that time, the summary states, the duty equalled 2.6% of the industrial gas tariff of Rs382 per MMBTU. It adds that the industrial tariff has since risen to Rs2,700 per MMBTU, so the same 2.6% share would now come to Rs60 per MMBTU.
Under Article 161(1)(a), the net proceeds of the federal excise duty on natural gas levied at the well-head, and royalties collected by the federal government, do not go into the Federal Consolidated Fund. They are paid to the province where the well-head sits. The KP summary stresses that the province has few other ways to raise revenue and relies heavily on its share of federally collected receipts for public services.
Constitutional route through the CCI
"Mineral Oil and Natural Gas" sits on Entry 2, Part-II of the Federal Legislative List. In light of Article 154, the summary argues, only the CCI can decide this change. KP therefore asked the council to raise the federal duty from Rs10 to Rs60 per MMBTU and, for later budgets, to link that specific rate to the Cost Performance Index (CPI) named in the summary — so the federal gas rate would not stay frozen for years again.
Timeline: what has happened so far
- 2010: Finance Act sets federal excise duty on natural gas at Rs10 per MMBTU; the KP summary says that equalled 2.6% of the industrial tariff of Rs382 per MMBTU.
- 2010 formula recalled: Article 161(1)(a) channels well-head FED and royalty proceeds to the producing province rather than the federal pool.
- Present industrial tariff: The KP summary cites an industrial gas tariff of Rs2,700 per MMBTU and argues the same 2.6% share is Rs60 per MMBTU.
- CCI request: The former PTI-led KP government submits a summary seeking the Rs10-to-Rs60 revision and a future CPI link for annual budgets.
Aasan alfaaz mein
Khyber Pakhtunkhwa ne federal government se kaha hai ke desi natural gas par tax (FED) Rs10 se b wha kar Rs60 per MMBTU kar diya jaye. Yeh tab se Rs10 par atka hua hai jab 2010 mein yeh rate set hua tha. Province ka kehna hai ke industrial gas ke daam bohot barh chuke hain, is liye usi purane hissay ke hisab se duty bhi barhni chahiye. Agar CCI manzoor kare to yeh paisa us soobay ko mile ga jahan gas ka well-head hai — seedha ghar ke bill ka naya rate abhi announce nahi hua.
