In a bid to eliminate circular debt, the country''s largest refinery, Pak Arab Refinery Limited (Parco) has proposed a committee comprising representatives of the Ministry of Finance, Water and Power and Petroleum empowered to divert electricity bills to a common bank account thereby enabling payments to fuel suppliers.
"All collections of electricity bills should be channelized to a common bank account and payments must be made by the committee so that all stakeholders can get a fair share," sources close to Managing Director Parco Rasheed Jang revealed to Business Recorder.
The Parco management warned "failing this, we see a complete breakdown of the system within the next few months from which recovery would become very difficult." Parco pointed out that the government has substantially increased electricity tariff during the last one year.
But despite this increase in electricity, circular debt has not been eliminated and continues to negatively impact on commercial entities. Parco has also approached the concerned federal as well as provincial agencies to repair the road network damaged due to floods around the refinery on a war footing. "We do not anticipate quick restoration of roads in view of the extensive damage," sources said quoting MD Parco as saying.
He also reportedly stated that due to the liquidity crunch, Parco is not in a position to open L/Cs for crude oil imports. Due to non-payment by power sector, oil sector is facing critical situation in continuing fuel supply. As on September 23, PSO receivables against different clients accumulated to Rs 150.148 billion. PSO''s dues against Wapda stand at Rs 47.891 billion, Hubco Rs 61.261 billion, Kapco Rs 28.631 billion, PIA Rs 523 million, OGDC Rs 344 million, KESC Rs 1.541 billion, financial charges on PIA Rs 960 million, Price Differential Claims (PDCs) on High Speed Diesel (HSD) Rs 1.382 billion and PDC on imported PMG Rs 3.699 billion.
PSO owes Rs 126.568 billion dues to local as well as international fuel suppliers as follows: Rs 37.602 billion to Parco, Rs 14.193 billion to PRL, Rs 9.499 billion to NRL, Rs 25.558 billion to ARL, Rs 4.694 billion to Bosicor and Rs 34.568 billion on account of L/Cs payments and other international fuel suppliers.