SSGC turns to be top OGDCL’s defaulter
Aftab Ahmed
Amid the corona economic crisis, Sui Southern Gas Company (SSGC) turns to be a top defaulter of Oil and Gas Development Company Limited (OGDCL) with Rs 192.4 billion dues pending for a long.
Gas companies, Uch Power plants, and refineries have trapped OGDCL in Rs 400 billion circular debt.
The management of the country’s largest oil and gas explorer has expressed serious concerns in a note sent to Petroleum Division.
The OGDCL officials said that its dues against gas companies, power plants, and refineries had accumulated to Rs 400 billion, including a late payment surcharge.
SSGCL
The Gas companies-SSGCL, SNGPL are major defaulters of OGDCL, Sui Southern Gas Company Limited (SSGCL) taking the lead among the defaulters who have to pay Rs 192.49 billion dues against the supply of gas.
It has to pay the actual bill of Rs 132.96 billion, whereas the payment on account of late payment surcharge stands at Rs 59.52 billion.
Sui Northern Pipeline Limited (SNGPL) is the second major defaulter. It has to pay a bill of Rs 133.52 billion. This amount included Rs 24.89 billion late payment surcharges and Rs 108.63 billion actual amount.
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UPL pays Rs 38.817 billion amount, which included Rs 4.8 billion late payment surcharges and Rs 34.01 billion principal amount.
OGDCL supplies crude oil to local refineries. Attock Refinery Limited (ARL) is the main customer of OGDCL.
Refineries are to pay Rs 35.94 billion to OGDCL. This bill includes Rs 8.5 billion principal amount whereas Rs 27.7 billion late payment surcharge.
It seems that refineries have not paid a bill for long, and therefore, its late payment surcharge had swallowed to Rs 27 billion, much higher than the principal amount.
Payments drop to 39 percent.
The crisis of Covid-19 had further aggravated the flagging liquidity situation of the country’s largest oil and gas explorer. Its customers had reduced payments to 39 percent.
They had also informed that the circular debt would further deteriorate the situation amid the current economic crisis.
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Despite the severe liquidity crunch due to prevailing circular debt and the Covid-19 crisis, OGDCL has been committed to settling all government dues within due dates. It paid royalty amounting to Rs 23 billion during the financial year 2019-20 to March 2020.
This payment of only 39 percent of the debt by the gas distribution companies and IPPs had catastrophically affected exploration and production activities. However, they also had the limited ability for timely payments of government dues, including royalty.
Cash Payment Plan
Piling circular debt and Covid-19 had aggravated the financial health of OGDCL. The company management had suggested the government to direct gas companies to submit a cash payment plan.
Moreover, it also asked for a change in the payment mechanism. It suggested the payment of royalty on supplies of crude and condensate and gas would be based on each receipt concerning the sales of royalty-bearing supplies rather than on an accrual basis without the imposition of penalties.
It further asked to direct the companies to provide a detailed payment plan to settle the debt. Ogdcl had also sought a guaranteed payment of at least 90 percent of their billed amount.
