Circular debt shoots up by ‘Rs500b’

The parliamentary Public Accounts Committee (PAC) was informed on Wednesday that circular debt in the gas sector increased during the current year but efforts were afoot to bring it down.

The committee which met with its chairman Noor Alam Khan in the chair, also sought details of perks provided to the top government functionaries including the prime minister, ministers as well as the judges of the superior judiciary.

PAC received a briefing from the petroleum secretary. 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 assets of the institutions, he said, adding that Rs300 to 400 billion dues would be cleared in lieu of power plants. He also said that an increase in the gas tariff had reduced the debt by Rs250 billion.

During the meeting, the chair asked the secretary why was the ban on new gas connection had not been lifted despite PAC’s order. The secretary replied that the summary in this regard was put up before the federal cabinet but it was rejected.

Noor Alam Khan ordered that PAC’s recommendations would be sent to the Prime Minister's Office for 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 that recent reduction in the prices of petrol and diesel and stressed the need for bringing the prices further down. “It's [prices of petroleum produces] 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 updated the PAC on the recovery of dues from various oil companies. However, Khan told the officials that the PAC had ordered them to recover the dues and not to negotiate with the firms.

The audit officials informed the committee that, the circular debt of gas was Rs1,270 billion on November 30, 2021. Auditor General Ajmal Gondal said that Oil and Gas Regulatory Authority (Ogra) was not implementing its instructions.

Committee member Nuzhat Pathan and other members drew attention of the participants towards the salaries of military personnel. Noor Alam Khan said that he was surprised when he saw the salaries of the president, prime minister, judges and bureaucrats.

“The salary of the prime minister is the lowest among them,” he pointed out. The auditor general said that the details of the perks of given to the president, prime minister, judges and bureaucrats had been prepared, which would be presented to the committee.