‘Pay Rs11.582bn against RLNG supplies’: SSGCL urges PD to get approval of KE’s pending subsidy

ISLAMABAD: Sui Southern Gas Company Limited (SSGCL) has requested Petroleum Division to get approval of KE’s pending subsidy and to pay Rs 11.582 billion against RLNG supplies and revoke permission to CPPs to sell electricity to national grid/KE.

On June 9, 2022, SSGC management wrote a letter to Secretary Petroleum to intervene and resolve the sensitive issue of KE default in making payments to SSGC against RLNG gas bills.

A copy of the letter has also been addressed to KE to keep it abreast about SSGC concerns over the issue of default and its adverse consequences to SSGC’s back to back commitments with SNGPL and RLNG supply chain. Managing Director SSGC Imran Maniar, in a recent letter to Secretary Petroleum further stated that after default by K-Electric in May, 2022, it is now critical to raise this issue at government level as SSGC is already trapped under circular debt issue and cannot sustain continuous default of K-Electric.

“The statistics of KE default have already been provided in earlier letter. Since May 26, 2022, KE only paid Rs 4.740 billion against overdue RLNG bills of Rs 16.322 billion leaving an outstanding balance of Rs 11.582 billion as on June 21, 2022,” he said, adding that in this regard, SSGC Management needs Ministry’s intervention to take up the matter with Ministry of Finance and ECC to approve the pending subsidy of KE to repay SSGCL outstanding bills of Rs 11.582 billion against RLNG supplies.

“As already informed to MoE, KE default is causing delay in SSGC ability to make timely payments to SNGPL against RLNG retention; and due to continuous defaults by KE, SSGC will be left with no option but to encash the bank guarantee of Rs 6 billion provided by KE as security deposit for natural gas and to reduce gas supplies to KE,” he continued.

SSGC Managing Director further stated that reference may also be made to MoE of April 8, 2008 conveying Prime Minister’s decision wherein CPPs were allowed to sell their surplus power to Discos or KE subject to the issuance of No Objection Certificate (NOC) by Sui Companies.

In view of sharp depletion of indigenous gas reserves and ultimately SSGC incapability to supply indigenous gas to KE, SSGC has requested that MoE take up the matter to the PM Office to get the decision revoked. This action will help SSGC to get additional30 MMCFD approx, which will be diverted to KE.

Copyright Business Recorder, 2022