ISLAMABAD: The gas companies on Monday asked the government to pass on the impact of higher gas costs to consumers to dissolve a Rs123 billion circular debt that had caused a serious cash flow problem for the entire gas production and distribution sector.

The chief executives of two gas utilities — Sui Northern Gas Pipelines Ltd (SNGPL) and Sui Southern Gas Company (SSGCL) — told a Special Committee of the Senate on Circular Debt that the cost of gas had been increasing but sale prices payable by consumers had not been changed by the previous government over the last five years, creating and accumulating deficit. The committee was presided over by Senator Shibli Faraz of PTI.

SNGPL Managing Director Amjad Latif said the gap between the demand and supply of gas fell sharply since March 2015 with the induction of imported liquefied natural gas (LNG). On the other hand he said his company’s financials worsened due to a big difference in the purchase and sale price of gas and settlement of two old disputes in courts, putting additional burden of about Rs60bn on his cash flows in just one year.

Published in Dawn, 28th August, 2018

https://www.dawn.com/news/1429410/raise-gas-prices-or-risk-circular-debt-warn-two-ceos