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ISLAMABAD: The circular debt in the gas sector has reached Rs900 billion as the Oil and Gas Regulatory Authority (Ogra) is set to hold a public hearing on Monday on a petition of the Sui Southern Gas Company (SSGC) about its revenue requirement for the financial year 2022-23 of Rs184,881 million.
According to the agreements between the federal government and the gas producers, the price of gas is correlated to the global price of crude oil/fuel oil.
Government estimates indicate that the circular debt in the gas industry has now surpassed Rs 900 billion.
Due to Karachi Electric’s (KE) failure to pay RLNG invoices of more than Rs27 billion, the gas company is apparently in a dire financial situation.
The utility has informed the Directorate General of Gas (Petroleum Division) in a letter that its unpaid debts to KE have reached an alarming total of Rs27.013 billion (excluding LPS of Rs2.645 billion), and that this situation is bad for the company’s viability and might even jeopardize its financial structure.
Due to unauthorized gas connections in Karachi and gas thefts in Balochistan, the SSGC’s UfG is still at 13% despite the Sui Northern Gas Pipelines Ltd reducing it to 8%.
