Pakistan

Petrol crisis: Business owners ask govt to clear circular debt

ICCI says PSO’s receivables have exceeded Rs200b.

Our Correspondent January 18, 2015

“If a sustainable solution of circular debt was not found, the whole energy chain of the country could collapse that would plunge the business and industry as well as the whole economy into deep crisis,” the statement said. PHOTO: ONLINE

ISLAMABAD: The business community has said it is solely the government which is to blame for the ongoing petrol shortage in the country. The Islamabad Chamber of Commerce and Industry (ICCI), in a statement on Sunday, said the petrol crisis had disrupted transportation of raw material and finished goods across the country.

The chamber said that fuel shortage had caused losses to the business and industry.

“Industry and the public were already facing power and gas load-shedding. The petrol crisis has added fuel to this fire,” said the press release. The body said that the government had failed to steer the country out of crises.

They said the petrol issue had been brewing for long as Pakistan State Oil (PSO)’s receivables had exceeded Rs200 billion due to which it started defaulting on its obligations in November 2014 while banks also refused loans to it. “However, despite these ominous conditions, the government did not take any corrective measures to stem the rising crisis.”

They said PSO meets almost 65 per cent of the petroleum needs of the country, but was facing a serious liquidity crunch. “The government should urgently help it out of its current troubles because if left stranded, the economy would come to a grinding halt.”

ICCI said PSO had reportedly sought an amount of Rs100 billion to restore oil imports and keep the energy cycle running. The chamber urged the government to immediately release funds to PSO as piecemeal payments would not help in coping with the issue.

The statement termed the surging power sector circular debt, which has now crossed Rs500 billion, the main reason behind the current crisis and stressed that the government take urgent measures to deal with the issue.

“If a sustainable solution of circular debt was not found, the whole energy chain of the country could collapse that would plunge the business and industry as well as the whole economy into deep crisis,” the statement said.

Published in The Express Tribune, January 19^th, 2015.