While there is a probability that the supply of crude oil, furnace oil, LNG and natural gas could shortly cease owing to non-payment of over Rs1.6 trillion dues by the govt. The government constituted a committee on Wednesday to work out modalities for avoiding the looming crisis and protecting petroleum companies from collapse.
In the ECC Cabinet meeting presided by Adviser to the Prime Minister on Finance Dr. Abdul Hafeez Sheikh, the decision was made. Dr. Sheikh also talked to the Sindh chief minister for evolving a consensus on increasing wheat support price.
In an SOS to the ECC, the petroleum division had warned that “inaction can lead to collapse of some of its otherwise profitable entities causing major disruption in the supply chain”. It said the Pakistan State Oil (PSO), Oil and Gas Development Company Ltd (OGDCL), Pakistan Petroleum Limited (PPL), and Pakistan LNG Ltd (PLL) were the four major entities that primarily financed the circular debt of about Rs 1.601tr of the entire country. This includes Rs1.081tr of principal amount and Rs520bn of markup.
The petroleum division sought adjustment of debt with equity in profitable public sector enterprises, power projects and companies in the energy chain.
It reported that the OGDCL was the worst sufferer with receivables of Rs 401bn, followed by the PPL with Rs 378bn and the PSO with Rs 323bn. At fourth stands the SSGCL with receivables of Rs 293bn, then the GHPL with Rs 113bn followed by Rs 54bn and Rs 39bn of the SNGPL and the PLL respectively.
The ECC formed a committee with representation from all relevant stakeholders, including the ministries of finance, power, petroleum, and planning, Securities and Exchange Commission of Pakistan, Oil and Gas Regulator Authority, OGDCL, PSO, SNGPL, PPL, GHPL, and PLL, to prepare a proposal on modalities for clearing the circular debt of the petroleum entities.