LNG pushes SNGPL, PSO, PLL into Rs 358b debt trap

Aftab Ahmed

Islamabad: The use of Liquefied Natural Gas (LNG) in the system has pushed the Sui Northern Gas Pipeline Limited (SNGPL), Pakistan LNG Limited (PLL), and Pakistan State Oil (PSO) into the trap of Rs 358 billion circular debt.

Sources told Newztodays.com that SNGPL received Rs 191 billion from different clients, including power, industry, and domestic sector, for supplying LNG.

However, it has to pay Rs 167.8 billion to LNG suppliers-Pakistan State Oil (PSO) and Pakistan LNG Limited (PLL), on account of the supply of LNG.

SNGPL has to receive Rs 18 billion from the power sector, Rs 8.01 billion from industry and others, and Rs 11.5 billion Government subsidy.

The gas utility is to receive Rs 104.1 billion from domestic consumers it supplied during winter seasons following the direction of the government to minimize the impact of load shedding. In addition, SNGPL is to receive Rs 52.3 billion from SSGC out of Rs 191 billion.

SNGPL is also to pay Rs 167.8 billion to LNG suppliers-PSO, and PLL on receiving LNG. So it has to pay Rs 92.8 billion to PSO and Rs 75.2 billion to Pakistan LNG Limited (PLL).

The entire energy chain is suffering due to circular debt. The power sector is also a significant defaulter of Pakistan State Oil (PSO) on oil supply.

The entire circular debt in the oil and gas sectors stood at Rs 1.6 trillion. Economic Coordination Committee (ECC) had formed a committee to resolve it. However, it continues rising.

The government had recently released Rs 90 billion to Independent Power Producers (IPPs) under a deal. PSO had received Rs 17.7 billion from Hubco.

However, SNGPL was suffering more as it could not recover the money it billed against domestic consumers on LNG supply. At present, there is no legal framework to recover LNG bills from domestic consumers.