Government should immediately settle issue of circular debt otherwise it will leave PSO bankrupt disrupting import of oil and gas which will damage economy and reverse all the economic gains, a business leader said Sunday.
Disruption in the energy supply chain will have a very negative impact on masses, industry and agriculture therefore the issue should be resolved on priority, former ICCI president Atif Ikram Sheikh said.
In a statement issued here on Sunday, he said that government is reluctant to clear the debt because it will widen the fiscal deficit which is against the national interests.
Atif Ikram Sheikh said that government settled circular debt worth Rs 480 billion on 2013 and claimed that it will never resurface again which proved otherwise.
He noted that now circular debt has resurfaced with Government claiming it to be at Rs 393 billion while private power producers say that it is Rs 414 billion.
Power producers are not paid therefore they are unable to pay Rs 274 billion to PSO on account of oil purchase. Therefore, PSO is unable to pay Rs 63 billion to oil and LNG suppliers of Kuwait and Qatar who can stop supplies any time.
He said that the situation is grim but the finance ministry is not ready to pay more than Rs 6 billion which is nothing more than a joke.
Authorities should review the policy of keeping the issue of circular debt alive worrying that settling it will damage their efforts to keep fiscal deficit in limits, he demanded.