On Wednesday, it was disclosed to the parliamentary Public Accounts Committee (PAC) that, despite efforts to reduce it, circular debt in the gas sector has increased over the past year.
The committee, which met with Noor Alam Khan as its chairman, also requested information about the benefits given to senior government officials, such as the prime minister, ministers, and judges of the higher court. The petroleum secretary briefed PAC. He told the committee that the circular debt of the petroleum sector was Rs1,200 billion in the last year, which had now risen to Rs1,700 billion.
“A plan has been prepared to get rid of the circular debt of the petroleum sector,” the secretary said. “The Ministry of Finance and the Ministry of Energy are working on it,” he added.
It has been decided to swap the institutions’ assets, he added, adding that dues of between Rs300 and Rs400 billion will be paid in place of power plants. Additionally, he claimed that a rise in petrol prices had resulted in a Rs250 billion debt reduction.
The meeting’s chair questioned the secretary about why the PAC’s directive to relax the restriction on new gas connections had not yet been implemented. The summary in this regard was presented to the federal cabinet, but it was rejected, the secretary responded.
Noor Alam Khan ordered that PAC’s recommendations would be sent to the Prime Minister’s Office for the lifting of the ban on gas connections. Khan also directed the gas utilities not to collect the increased meter rent from the gas consumers.
The chair expressed satisfaction with the recent reduction in the prices of petrol and diesel and stressed the need for bringing the prices further down. “It’s [prices of petroleum produce] still too much, the lower it is, the better,” he added.
The committee was also informed that the Ministry of Foreign Affairs would discuss the Iran-Pakistan gas pipeline issue with the US ambassador upon his return from Washington.
The officials gave the PAC an update on the collection of overdue amounts from several oil corporations. Noor, however, informed the officials that the PAC had instructed them to recover the debts and not to engage in negotiations with the businesses.
The committee was informed by the audit officers that as of November 30, 2021, there was Rs. 1,270 billion in circular debt for gas. Oil and Gas Regulatory Authority (Ogra) was not carrying out its directives, according to Auditor General Ajmal Gondal.