Petroleum sector circular debt rises to Rs1.7 trillion

ISLAMABAD: The Petroleum Division told the Public Accounts Committee that the circular debt of the petroleum sector has increased by more than Rs500 billion during one year from Rs1,200 billion to Rs1,700 billion.

While expressing strong annoyance over the non-recovery of arrears worth Rs 57 billion from petroleum company, Chairman Public Accounts Committee Noor Alam Khan directed the Federal Investigation Authority (FIA) to arrest the owners of the petroleum company, freeze their properties, sell their houses and make recoveries. Chairman PAC also directed to put the names of the directors of the petroleum companies on the Exit Control List (ECL).

While PAC Chairman Noor Alam Khan directed to submit the details of the perks and privileges of the President, Prime Minister, Chief Justice Supreme Court, Judges of the Supreme Court, Federal Ministers, Parliamentarians and Federal Secretaries by today (Thursday). The meeting of the Public Accounts Committee was presided over by Chairman Noor Alam Khan in which the audit paras related to Petroleum Division for the financial year 2021-21 were examined.

During the briefing, the secretary of the Petroleum Division said last year the circular debt of the petroleum sector was Rs1,200 billion, which has now risen to Rs1,700 billion rupees. The secretary Petroleum Division told the committee that a plan has been prepared to eliminate the circular debt by swapping the assets and circular debt will be cleared by giving GEPCO and Nandipur Power Plant to PSO. He told the committee that the Ministry of Finance and the Ministry of Energy are working to eliminate the circular debt of the petroleum sector through an asset swap, which will clear the power plants’ liabilities worth Rs300 billion to Rs400 billion. Besides, he said circular debt worth Rs250 billion would be removed by increasing the gas tariff from January 1.

The PAC issued instructions to the gas companies to stop collecting the increased gas meter rent from the consumers. Chairman PAC Noor Alam Khan said that the monthly rent of Rs500 per meter is too high, it is cruel and it should be withdrawn as the burden on the poor has been increased. The secretary Petroleum Division said that the gas meter rent has been increased to Rs500 for high gas consumption customers, but it is adjustable. He said that the meter rent has been increased from Rs40 to Rs50 per month for those using up to one cubic hectare meter. The secretary said that the gas bills of the customers who have a two-burner stove and one heater will be reduced.

He also questioned why the ban on new gas connections has not been lifted despite directions from the committee. The secretary said that the issue was taken up before the federal cabinet, which rejected the summary. The Chairman PAC said that the PAC should send its recommendations to the Prime Minister’s Office to lift the ban on gas connections. Member Committee Ahmed Khan asked about the purpose of adjustment charges of Rs1,500 to Rs2,000 in gas bills. On the issue of gas tariff for the urea plants, the secretary told the committee that not all urea plants are supplied with gas at one tariff, as the amount of gas supplied to the plants varies.

While examining the audit objections of the Ministry of Petroleum for 2020-21, reviewing the issue of recovery of Rs42 billion rupees from petroleum companies, PAC Chairman Noor Alam Khan said that petroleum companies owned public money. The PAC was further informed that FIA had recovered Rs3.9 billion from these companies and negotiations are on for payment of the remaining amount. Expressing his annoyance over the collection of only Rs3.9 billion, Chairman PAC said the PAC had ordered for recovery of the arrears and did not want any negotiations. He also directed the FIA to find out the name of the director who negotiated with a petroleum company. He directed the Federal Investigation Authority (FIA) to arrest the owners of the petroleum company, freeze their properties, sell them and make recoveries. He also directed to put the names of the directors of petroleum companies on the ECL.

The Petroleum Division told PAC that a petroleum company had become a defaulter of Rs57 billion. “We asked the FIA and all related institutions for recovery but that could not be done. Now if both the plaintiff and the accused are negotiating to return the arrears, what can we do,” the Petroleum Division officials said.

In the meanwhile, Chairman PAC Noor Alam Khan directed to submit the details of the perks and privileges of president, prime minister, chief justice Supreme Court, judges of the Supreme Court, federal ministers, parliamentarians and federal secretaries by today (Thursday).

While examining audit para, MD SNGPL told the committee that strict action was taken against Badar CNG station at Bhakkar involved in gas theft worth Rs one billion. “A raid has been conducted, and an FIR has also been lodged,” he told the committee. Chairman PAC said the officials of the SNGPL involved in theft should also be identified as it could not have been made possible without the connivance of the SNGPL officials. The PAC has sent the case of Badar CNG station Bhakkar gas theft to FIA for investigation.