Gas sector’s circular debt reaches Rs 2900bn 

ISLAMABAD: Country’s gas sector is facing a loss of Rs 1 billion per day while its annual loss is Rs 350 billion and the circular debt of the gas sector has reached Rs 2900 billion.

This shocking disclosure was made by the Caretaker Federal Minister of Energy Muhammad Ali while briefing the journalists regarding the power sector of the country.

Ali also announced that gas load shedding will be done in the winter season while the situation of gas supply will remain the same as last year. As much gas as was supplied last year will be supplied this year, said the caretaker energy minister.

The Energy minister further told that the work related to the increase in gas prices is in progress, as an increase in the gas prices has become inevitable for the improvement of the gas sector while 60 percent of the gas consumers will be protected from the increase the in the prices.

The effort related to the increase is not to burden the poor consumers with more than Rs 500, said the Minister of Energy.

The increase in gas prices will be higher for the rich class, said the Minister of Energy, he added.

About the proposed reforms for power distribution companies (DISCOs), Muhammad Ali said three proposals are being worked on for reforms in the DISCOs. He said that under the first proposal, the privatization of DISCOs is under consideration, while long-term concessional agreements are also proposed for power companies.  He said under this method, the management of DISCOs would be given to the private sector for more than 20 years. He said the proposal to give the power companies (DISCOs) to the respective provinces is also under consideration. Changes in the board of directors of the companies are going to be made and this change in the board of directors will start the process of reforms, said the Minister of Energy.

Caretaker Federal Minister of Energy Muhammad Ali said that we cannot complete the process of privatization but we will start it, the institutions included in the list of privatization will be privatized.

Reforms are underway for power plants including DISCOs, the government's focus is on power distribution companies, said energy minister.

Responding to a question about likely decrease in the per liter prices of petroleum products with the start of next month of October, the caretaker federal energy minister Muhammad Ali said it is too early to say anything about price reduction as the price of petroleum products will be fixed on September 30.

If the depreciation of the dollar continues, positive progress is definitely expected, said the Minister of Energy.

The purchase of oil from the international market is also considered while fixing the oil prices, the Minister of Energy added.