ISLAMABAD: Ministry of Industries and Production (MoI&P) has sought Rs 623 million to pay bills of SSGC of eight months, i.e., from July 2021 to February 2022 against Pakistan Steel Mills (PSM), official sources told Business Recorder.
The MoI&P, in its summary to the ECC said that due to closure of the production activity in Pakistan Steel Mills (PSM), low flame gas of 2 MMCFD is being supplied to PSM primarily to preserve the Coke Oven Batteries and refractory kilns with an average monthly bill of Rs.80 million.
According to the Ministry, privatisation process of PSM is at an advanced stage. The retention or disconnection of gas supply of 2 MMCFD to plant is a policy decision which shall be made in consultation with Privatization Commission (PC) and Board of Investment (BoI). The outcome of the consultation shall be brought before the ECC of the Cabinet in due course of time.
During the Financial Year 2020-21, the ECC of the Cabinet had approved Rs.960 million against payment of gas bills. Subsequently, Finance Division has released payment against the monthly gas bills for the period from July 2020 to May 2021.
Ministry of Industries and Production argues that the production status of PSM remains unchanged and therefore to preserve the Coke Oven Batteries and refractory kilns, a low flame gas of 2MMCFD is required to be supplied to the PSM for which an amount of Rs. 960 million (80 million x 12) is needed for making payment to SSGC during the financial year 202 1-22.
Ministry of Privatisation Commission, in its comments has stated that PSM management should place the matter before PSM Board for consideration and should approach the federal government in the light of PSM Board.
Finance Ministry maintains that the Ministry of Industries and Production should present utilization report/ update on the releases and verify claimed amount based on actual bill charges before forwarding release request to the Finance Division.
Petroleum Division, in its comments on the summary stated that SSGCL has pointed out that at present the long outstanding receivables from PSM has reached a staggering level of Rs. 67.966 billion including simple LPS of Rs 45.386 billion as of October 31, 2021.
The MoI&P, in its summary has requested the ECC to consider and approve to release an amount of Rs. 960 million (80 million x 12) to SSGC for the FY 2021-22 with the direction to Finance Division for releasing an amount of Rs. 620.85 million (lump sum) immediately for making payment of 8 months outstanding gas bills, i.e., July 2021 to February S2022 from the already approved budgetary allocation of Rs. 16 billion to PSM.
Copyright Business Recorder, 2022
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