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Consumers owe Rs473bn in GIDC arrears

Out of a total of about Rs790bn worth of GIDC, an amount of Rs321bn had been deposited in the federal treasury as of April 2021

ISLAMABAD: Briefing the Senate Standing Committee on Petroleum on Monday, the Petroleum Division said that out of a total Rs790 billion on account of the Gas Infrastructure Development Cess (GIDC), various consumers owed approximately Rs473bn in arrears.

The Senate body meeting, presided over by committee chairman Senator Abdul Qadir, discussed overall foreign investment in the country’s oil and gas sector.

The committee was informed that out of a total of about Rs790bn worth of GIDC, an amount of Rs321bn had been deposited in the federal treasury as of April 2021 while Rs473bn was still recoverable from various parties. There were also stay orders from the high courts over the recovery of Rs356bn while a waiver of Rs50bn had been given to the CNG sector. The committee chairman directed relevant authorities to seek support from the courts to assist in the recovery of GIDC arrears.

Along with the Petroleum Division, the committee had also called the State Bank of Pakistan (SBP), Securities & Exchange Commission of Pakistan (SECP), Federal Investigation Agency (FIA) and other agencies concerned to examine alleged financial misappropriation at Hascol Petroleum.

On the occasion, Secretary Petroleum Dr Arshad Mahmood gave an update on the North-South Gas Pipeline Project which is being developed in collaboration with Russia.

The 1,040km pipeline — also called Pakistan Stream Gas Pipeline – will be constructed at an estimated cost of $2.5bn, with Pakistan’s shareholding of 74pc and Russia’s at 26pc. “This is by far the biggest government-to-government project. The project had been under process since 2014 and once it begins, it should take about two years to complete,” he added.

The Senate committee chairman stressed on the need for completing Pakistan Stream Gas Pipeline on a priority basis.

The committee also took up the suspicious financial affairs at Hascol and decided to involve relevant regulatory bodies and investigation agencies with the assistance of the Ministry of Finance to look into the matter in detail. Misappropriations of over Rs15bn had been reported at the company.

Senator Afnanullah Khan alleged that Hascol’s management had prepared Rs7.4bn worth of fake purchase orders while the CEO of the company had committed a Rs8bn fraud. He said the company had misappropriations or misdeclarations of about Rs75bn. “The committee would like to know what action had been taken by the relevant government departments into the matter,” Senator Khan said.

Secretary petroleum said that Hascol was claiming more than Rs60bn losses in three years. “If this had happened, the company should have already collapsed,” he said. “Hascol’s petrol pumps had run dry on Eid in different cities of the country and wondered if so many losses were happening then what were their boards and general managers doing,” he questioned.

“Who is responsible for such massive corruption?” Senator Mohsin Aziz questioned. Stressing that his colleagues and the Petroleum Division must not ignore the matter, he proposed to a joint meeting of the Senate’s standing committees on Finance and Petroleum to probe the matter in detail.

Senator Sadia Abbasi, however, advised that it would be better to invite relevant bodies including the SBP, SECP, Petroleum Division and FIA to examine the matter. The committee unanimously decided to hold a one-point meeting on the subject by calling all the relevant regulators and departments.

The unemployment of Balochistan’s engineers and diploma holders in the petroleum sector was also discussed. The parliamentary panel also took up the matter of daily wage employees in Sui Southern Gas Company (SSGC) and Pakistan Petroleum Limited (PPL) working for the last 16 years.

Ahmed Mukhtar Naqshbandi

Media person and communication expert for over 25 years. Worked with Dow Jones News, World Bank, CNBC Pakistan, Aaj TV, ARY TV, Abbtakk TV, Business Recorder, Pakistan Observer, Online News Network, TTI Magazine and other local and world Publications.

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