ISLAMABAD: The Federal Ministry of Finance has declared the financial system of PSO, Pakistan Petroleum Limited, OGDCL, Sui Southern and Sui Northern Gas Companies as ineffective.
According to sources, the Ministry of Finance has raised questions on the financial system of the oil and gas sector and said that the infrastructure of the aforementioned oil and gas companies has become stereotyped and ineffective, due to which all the 5 companies are facing challenges.
He said that the recovery problems of SNGPL and SSGPL have weakened their financial position, due to which their dependence on the government’s financial support has increased.
The Ministry of Finance has said that cash flow problems have arisen in the energy sector due to circular debt and liabilities have increased due to non-payments, which is affecting liquidity.
According to the Ministry of Finance, the increase in liabilities has affected the economic situation of the companies and the dependence of government institutions on government support has increased and production and operational costs have increased due to old technology.
In this regard, it has been further stated that there are losses in the gas transmission and distribution system, capital losses can be limited and operational efficiency can be improved through a business plan, and the problem of circular debt can be overcome by improving the financial system.
