Total circular debt looming at Rs1,188bn, ECC told

—Decision to import urea to be taken after ascertaining domestic fertilizer production

ISLAMABAD: The Economic Coordination Committee (ECC) of the cabinet was informed on Wednesday that the total circular debt of the country stands at Rs1,188 billion.

In a meeting of the committee held under the chairmanship of Federal Minister for Finance Asad Umar at the Prime Minister’s Secretariat, the Ministry of Energy gave a detailed presentation on the amount of piled up circular debt.

According to the data compiled up to July 31, 2018, by the ministry, it was brought to the notice of the ECC that the amount of circular debt is standing at Rs596 billion with an increase of Rs30 billion in the last month. It was further said that another Rs582 billion are parked with the power holding companies under the STFF arrangements.

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The ECC identified the 5-6 key areas that accounted for the pile up of these liabilities and formed different committees to work upon reasons and formulate their suggestions to be presented in the next ECC meeting that is to be scheduled in the next week.

The committee will later present its suggestions to the cabinet for the approval and decision on the future course of action. The ECC chairman stated that all facts will be shared with the public to make decision making a transparent and inclusive exercise.

The ECC chairman further expressed displeasure on the issue of fertilizer pricing and its export undertaken by the previous government, which was totally against the interests of the farmer community. He said that the interest of the poor farmer should be the supreme motivation for taking such decisions.

The committee was informed that the total requirement of fertilizer for the country for this sowing season would be around 600,000 tonnes. The ECC directed that a committee will be formed under the chairmanship of Industry and Production Adviser Abdul Razak Dawood to hold discussions with the local fertilizer industry to ascertain the total domestic production.

The committee will present its recommendations in next ECC meeting following which the decision will be made regarding the import of urea.

The committee has also decided against changing the sui-gas prices.

Moreover, the summary for Pakistan State Oil’s financial health and liquidity position was deferred as the issue was closely linked with circular debt

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