Karachi, May 18, 2023 (PPI-OT): Pakistan Oil and Gas - Gas circular debt - Growing fatal

Energy chain’s circular debt has deeply marred any prospects the state owned energy companies have had against depleting hydrocarbon reserves/growing energy needs of the country.

Both the Sui companies are at the frontlines of supplying 2900-3000mmcfd of gas annually to the domestic sector. Both suffer from operational inefficiencies on account of UFG losses alongside a highly regulated pricing structure set by the Govt.

Both the state owned E and P companies i.e. OGDC and PPL, leading to significant challenges in terms of operational activities and substandard dividend payouts (unlike MARI and POL).

Country’s national OMC is presently battling out working capital issues, more specifically burgeoning trade debt situation owed on account of RLNG supplies to SNGPL.

Implementation of the circular debt relief remains the need of the hour, either through sector overhauls or a one-off payouts through the federal revenue kitty.