Ministry of Petroleum and Natural Resources is reportedly in no mood to restore gas supply to Pakistan Steel Mills (PSM) until acceptable payment is agreed with the SSGC, well informed sources told Business Recorder. Chief Executive Officer, PSM, Major General Zaheer Ahmad Khan (retired) met with the Minister for Petroleum and Natural Resources, Shahid Khaqan Abbasi on August 21, 2015 and requested him to restore gas supply but the decision is yet to be implemented.
Chief Executive Officer (CEO) wrote a letter to Shahid Khaqan Abbasi on August 24, 2015 and cited a meeting held on August 21, 2015 in which a decision was taken to restore PSM''''s gas supply and was communicated to SSGC. As a follow-up, a team of senior officers of PSM visited SSGC head office on August 24, 2015 at 11:30 am to resolve the outstanding issue amicably. The team could not meet senior officer of SSGC because the concerned officers were reportedly busy in connection with their official commitments. Usman (G.M. Treasury), however, had a meeting with PSM team.
According to CEO, PSM his team explained the proposed payment mechanism of SSGC bills through post-dated cheques which it had taken along. However, GM treasury SSGC did not agree to the payment proposal and instead said gas could only be restored subject to fulfilment of following conditions: (i) notification from Petroleum Minister''''s office for restoration of gas; (ii) immediate payment of July 2015 billion amounting to Rs 170 million along with a few million of late payment surcharge (LPS); (iii) Future payment through escrow account in which 80 per cent amount will have to be deposited in the account of SSGC; and (vi) outstanding amount of Rs 36 billion (principal amount Rs 18 billion) and LPS Rs 18 billion to be settled against transfer of land to SSGC.
The PSM team, however, stated that due to severe financial constraints, PSM was not in a position to agree to the proposal floated by the SSGC and suggested that SSGC management should consider the following proposal: (i) the escrow account could be opened and payment to the tune of 40 per cent considered for SSGC as PSM has to pay other bills to meet its routine unavoidable expenditures; and (ii) the outstanding payment of Rs 18 billion principal (and Rs 18 billion LPS) has been included in the working papers of next meeting of ECC. The decision taken by the ECC would be implemented.
When contacted, the Petroleum Minister said that gas will be restored when payment issue will be resolved between the two companies. "SSGC policy, like any company, is to provide gas to consumers who pay for the gas. Natural gas to PSM will be provided when the need it, are willing to pay for the gas, and are willing to settle Rs 36 billion in dues payable to SSGC," he added. The issue of SSGC is expected to be taken up in the forthcoming ECC meeting to be presided over by the Finance Minister, Senator Ishaq Dar.
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