PESHAWAR, Jan 20: The NWFP has become eligible to receive royalty on gas and crude oil asone of its oil and gas fields started commercial operations during the current financial year, official sources told Dawn.

"The federal government has started releasing funds to the NWFP government under the heads of royalty on crude oil, royalty on natural gas, and gas development surcharge from the current financial year," said a senior finance manager of the province.

This is for the first time that the province has been released funds under the said head, helping it to receive anything against the proceeds projected against the said three heads of provincial receipts.

The provincial government, according to its record, has been reflecting revenue receipts on accounts of royalty on gas and crude oil and gas development surcharge for the last three years in the hope of getting funds under these heads from the federal government.

However, it ended up with zero receipts under the said heads in financial year 2001-02, 2002-03 and 2003-04 despite projecting considerable amount of funds which the province had anticipated to receive under the said heads.

"We have been making projections after being told by the federal authorities that the province would receive certain amount of funds under the said heads," said the finance manager, adding, "we did not mention the receipts in the said three years on our own as the information to that effect was passed on by the federal government."

Official sources, however, said that the opening up of the account under the said three heads because of disbursement of funds, for the first time, by the federal government would help the NWFP government avoid experiencing budgetary discrepancies it went through during the financial years 2001-02 and 2003-04.

The provincial government, in keeping with the last three financial years, has projected to receive Rs188 million on account of royalty on crude oil, Rs118 million under the head of royalty on natural gas, and Rs51 million as gas development surcharge during the on-going financial year.

"By the end of the first quarter of the current financial year the province had been released around Rs5 million collectively under the said three heads," said an official source, and added that the federal government started releasing funds to the province only after an oil and gas field, which had been set up at Shakar Darra in Kohat District of Peshawar, started commercial operations during the current financial year.

"The province did not get anything under the said three heads during the last three financial years despite promises made by the federal government because the Shakar Darra oil and gas field could not start commercial operations," said the finance manager.

Apart from the Shakar Darra oil and gas reserves, substantial deposits of gas have also been found in Gurgury, in district Karak of the NWFP.

The first of the four wells, which will be established in the Gurgury gas field by a Hungarian firm, MOL, will start commercial operations in the near future, according to sources in the Sui Northern Gas Pipeline Limited.

Disbursements on account of royalty on natural gas and gas development surcharge will also undergo significant improvements in the months to come, according to sources in the finance department, NWFP.

Official sources said that the amount released to the province so far under the said three heads was much less than the actual projections made by the provincial government under its current financial year's budget. However, payments under the said head, they added, were likely to improve in the months to come as the commercial operations of the Shakkar Darra oil and gas field gained momentum.

The opening up of a new avenue of receipts, said the official sources, would help the provincial government to improve its resource base and partially overcome its financial problems.

"Our share from the federal proceeds under the said three heads will gradually grow in the years to come, thus, it will be of great benefit to the provincial government," said the official source.

Last year, according to official documents, the provincial government was expecting to receive a total of Rs280 million collectively under the heads of royalty on crude oil and gas. In the end, the province got nothing against that, though at the end of the last financial year the federal government had intimated it to provide it with about Rs200 million as per its revised estimates.