ISLAMABAD: The government is mulling over reducing the circular debt by allocating its profit share from the earnings of Oil and Gas Development Company Limited (OGDCL), Pakistan Petroleum Limited (PPL), Pakistan State Oil (PSO), Sui Northern Gas Pipelines Limited (SNGPL), Sui Southern Gas Company Limited (SSGCL) and others, Profit learnt on Tuesday.
According to sources, a high-level meeting under the chair Adviser to the Prime Minister on Finance and Revenue Shaukat Tarin will be held on Wednesday to discuss and analyse various issues of the energy sector, including various options to reduce the size of the ever increasing circular debt.
The meeting will be attended by federal secretary Finance, secretary Petroleum, AFS-CF, managing director (MD) of OGDCL, chief financial officers (CFO) of PPL, CFO, PSO and the deputy managing director of PARCO.
“The meeting will discuss in detail the distribution of the government’s profit earned from OGDCL, PPL, PSO, SNGPL, SSGCL, PARCO, etc. during the last few years to reduce the size of circular debt,” sources said.
Earlier on December 2, the Ministry of Energy had informed a meeting of the Cabinet Committee on Energy (CCOE) held under the Chairmanship of Federal Minister for Planning Asad Umar that the country’s circular debt had climbed to Rs2,419 billion by the end of October.
The CCoE was also informed that the monthly accumulation had stood at Rs35bn as it went up to Rs139bn during the first four months (July-October) of the current fiscal year 2021-22.
Reportedly, total payable to power producers stood at Rs1,420bn, GENCOs payables to fuel suppliers stood at Rs91bn, the amount parked to Power Holding Company at Rs908bn, making the outstanding amount of circular debt touch Rs2,419bn.
Moreover, unbudgeted subsidy for AJK and KE increased the circular debt to the tune of Rs75bn. As much as Rs292bn is pending in receivables from KE as of June 2021 due to a subsidy dispute between the company and the government. Stocks of the Power Holding Limited and IPPs also projected adjustments and payments through the federal budget as repayment of Rs130bn PHL debt and the settlement of outstanding arrears of Rs427bn to IPPs in FY22.
