PAC reveals Rs68b unpaid levy by two petroleum firms

PAC also expresses concerns about the failure to collect Rs14 billion in levy and LPS from Cnergyico and Hascol.

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The Public Accounts Committee (PAC) has uncovered that two petroleum companies failed to pay a total of Rs68 billion in levies and penalties.

One of these companies, Byco, which defaulted on its obligations, subsequently changed its name. The secretary of the Petroleum Division confirmed that Byco now operates under the name Cnergyico, and has agreed to pay Rs1 billion per month to settle its outstanding dues.

The PAC raised concerns about the re-registration of a defaulting company under a different name. They have questioned how Cnergyico was allowed to operate after its insolvency, with PAC chairman asking the chairman of the Securities and Exchange Commission of Pakistan (SECP) for clarification.

In response, the petroleum secretary stated that it was the company itself that approached the SFIC, not the Petroleum Division. Syed Naveed Qamar also questioned the legal basis for referring the case to the Special Investment Facilitation Council (SIFC).

Audit authorities revealed that the case was also referred to the Federal Investigation Agency (FIA) and the National Accountability Bureau (NAB). However, during the PAC meeting, FIA and NAB officials appeared unaware of the latest developments, leading to frustration among PAC members.

Hina Rabbani Khar, a committee member, expressed strong disapproval, questioning why government agents who are responsible for collecting funds are unwilling to release them. Qamar emphasised that without involving senior officials, the issue would persist.

Additionally, the PAC expressed concerns about the failure to collect Rs14 billion in levy and LPS from Cnergyico and Hascol.

The secretary of Petroleum Division explained that despite several efforts to recover the money, there is no effective mechanism in place. However, Cnergyico has agreed to pay the amount in monthly installments of one billion rupees.

The committee has now summoned NAB chairman and FIA director general for further clarification. The PAC also plans to call the OGRA chairman to discuss the issue.

In response to this development, Cnergyico spokesperson has shared a statement:

"Cnergyico has actively engaged with the government at various forums over the past three years to settle the petroleum levy dues. However, the issue remains pending with the government. To resolve this, Cnergyico has sought court intervention to settle the matter and recover dues amounting to nearly Rs58 billion from government-controlled entities.

"Since last year, the apex and executive committees of the SIFC have directed the government to sign a settlement plan for the agreed petroleum levy. In compliance with the SIFC’s directives, Cnergyico has already submitted the settlement plan to the Government and is currently awaiting a response.

"The Implementation Committee of the SIFC has recently called upon the government to finalise the settlement plan, whose initial deadline was 15th January. Cnergyico has not faced insolvency; rather, the company has merely undergone a name change."