Circular debt goes up to Rs 370b, PAC told

The Public Accounts Committee (PAC) of the National Assembly was informed on Tuesday that the circular debt had reached an all time high of Rs 370 billion, mainly due to non-payment of subsidy by the federal government.
During the PAC meeting under the chairmanship of Nadeem Afzal Gondal, Petroleum and Natural Resources Secretary Waqar Masood said the circular debt was increasing by Rs 15 billon to Rs 20 billion each month. He said 95 percent of the cost of oil and gas was paid through collection of bills, but the federal government was not paying its due subsidy.
Audit officials told the committee that there had been four audit objections on circular debt of Rs 40 billion. The committee took a strong exception and expressed anger over the petroleum secretary for not coming to the meeting fully prepared. It questioned why the responsibility was not fixed for circular debt and punishment not awarded. On import of LNG, the secretary said no policy had been framed for the purpose. However, per initial estimates, 1500 MMCF of LNG would be imported from Qatar. He said the ECC had given a go ahead to import LNG and the government would give a guarantee in this connection. He said initial negotiations were underway with Qatar in this connection. The PSO chairman informed the committee that the government owed an amount of Rs 242 billion to the oil company. The committee demanded a report from officials of the Ministry of Petroleum and Natural Resources about the increase and reduction in POL prices. The audit officials said from 2004 to December 2005, PSO under joint ventures provided HSD to Pakistan Motorways but the company could not make the payment according to the agreement, causing a loss of Rs 158 million. The committee directed for an inquiry into the matter and fixing responsibility within 15 days. MNA Zahid Hamid drew the attention of the committee towards the fact that while development schemes of gas were being completed with his quota of resources, they were being inaugurated by government ministers and all connections were being given to workers of a particular party.