Circular debt of Oil and Gas Development Company (OGDCL) increased by Rs 8.6 billion in the first six months of current fiscal year and rose to Rs 119.8 billion by December 31, 2016 against Rs 111.2 billion in June 30, 2016. This was revealed in documents available with Business Recorder.
Trade/circular dent includes the following: overdue amount of Rs 86,645 million on account of inter corporate circular debt receivable from oil refineries and gas companies was witnessed during the first six months of the current year against Rs 78,708 million on June 30, 2016; in other words an increase of Rs 7.9 billion was recorded in the first six month of the current financial year.
Gas distribution companies - Sui Southern Gas Company Limited (SSGCL) and Sui Northern Gas Pipeline Limited (SNGPL) - are the main contributors towards trade debt. During July-December 2016, total amount due from SSGCL stood at Rs 67,166 million and from SNGPL at Rs 14,657.
An amount of Rs 59,395 million was overdue against SSGCL and Rs 16,525 million against SNGPL on June 30, 2016. Rs 3.4 billion receivables from three Independent Power Producers and a fertilizer company on account of Gas Infrastructure Development Cess (GIDC) and related sales tax paid thereon. The comparable amount was Rs 3.17 billion as on June 30, 2016.
Cabinet Committee on Privatisation (CCoP) meeting on February 02, 2017 deferred the divestment of 5 percent OGDCL shares on the national stock exchange until its share price touches Rs 200 per share. Director Khurran Shabbir, Fair Deal Securities told this correspondent that over the course of the past few months, the oil and gas sector has been relatively stable and OGDCL''s share price has also recovered by now - Rs 156.90 per share on Friday (yesterday).
OGDCL was approved for privatisation on May 29, 1997, along with other state-owned entities, by the Council of Common Interests (CCI). According to government estimates, domestic gas production is expected to drop from 4,100 million cubic feet per day (mmcfd) to 1,600 mmcfd by 2022 as existing reserves are depleting. The government''s 2014 plan was to drill 400 wells till 2018 with the objective of boosting oil and gas supplies, but unless the circular debt problem is addressed it would be difficult to achieve the exploration target, an official of OGDCL said. The OGDCL management toldBusiness Recorder that the circular debt would not only negatively impact on the ongoing development and exploration activities but also many projects would remain in doldrums.
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