Circular debt mounts to Rs596bn, total power liability rises to Rs1188bn

ISLAMABAD: The Economic Coordination Committee of the Cabinet (ECC) was informed on Wednesday that the country’s circular debt stood at Rs 596 billion, with an increase of Rs 30 billion in July.

Another Rs 582 billion was parked with the Power Holding Company under the STFF arrangements, hence bringing the total current liability to Rs1,188 billion, the Ministry of Energy, Power Division told ECC in its detailed presentation based on data compiled upto July 31, 2018.

The ECC meeting was held here with Federal Minister for Finance, Revenue, and Economic Affairs Asad Umar in the chair.

The ECC identified five to six key areas that accounted for the piling up of the liabilities and formed different committees to work upon the reasons and formulate their suggestions to be presented in its next meeting that was scheduled next week.

The ECC would later present its suggestions to the Cabinet for approval and decision on the future course of action.

Asad Umar said all the facts would be made public to make decision making a transparent and inclusive exercise.

He also expressed displeasure over the issue of fertilizer pricing and its export, taken by the previous government, which was totally against the interests of farmer community.

The interests of the poor farmer should be the supreme motivation for taking such decisions, he added.

The ECC was informed that the total requirement of fertilizer for the current sowing season in the country would be around 600,000 tons.

The committee decided to form a sub-committee under the chairmanship of Advisor Industry and Production Abdul Razak Dawood to hold discussions with the local fertilizer industry to ascertain the total domestic production. It would present its recommendations in the next ECC meeting following which the decision would be made regarding import of Urea.

The summary for Pakistan State Oil's financial health and liquidity position was deferred as the issue was closely linked with circular debt.