The Cabinet Committee on Energy (CCoE) has ordered the quick implementation of the oil crisis report.
The move comes while the power sector circular debt is at Rs. 2.327 trillion as of June 30, 2021. CCoE also ordered to transfer additional powers to Oil & Gas Regulatory Authority (OGRA) to regulate the oil marketing sector, Dawn News reported.
As of May 2021, the power sector’s circular debt stood at Rs. 2.402 trillion, according to the monthly report presented by the Power Division. This is a year over year increase of Rs. 251 billion, from the debt recorded in July 2020 at Rs. 2.153 trillion.
Adding the recently made payments to the independent power producers (IPPs) of Rs. 90 billion, the report projects the debt figure to be Rs. 2.327 trillion as of June 30, 2021. This means an increase of Rs. 177 billion in circular debt during the entire fiscal year 2020-21.
Much of this hike can be attributed to the unbudgeted subsidies as well as interest on delayed payments to IPPs.
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The committee meeting was chaired by the Planning Minister, Asad Umar, during which the CCoE also asked for a final position of all stakeholders on the issue of pipeline capacity allocation. This feedback is needed before the next meeting of the committee so the final investment decisions (FIDs) can be secured from investors of two additional merchant LNG terminals, the news report added.
Powers Transferred to OGRA from DG Oil
The committee also decided that a lot of powers currently residing with the Director-General of Oil need to be transferred to OGRA. For that purpose, a draft of revised rules was agreed upon during the meeting.
Under the said draft, every refinery shall now submit its production program for the next half of the fiscal year, one month in advance to the regulator.
OGRA would now approve the said program of production. Every refinery shall carry on its production in accordance with the approved program of production.
Likewise, OGRA will be empowered to collect bi-annual production plans from every blending plant, grease plant, reclamation plant, and white oils production plant.
Additionally, no agreement relating to the supply, purchase, sale, storage, or export of any imported petroleum products shall be entered into by any person without the prior approval of the regulator.
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OGRA would have powers to impose conditions from time to time for a marketing company to import products where the production of petroleum products by the local refineries is found insufficient.
Such plants and refineries will also be required to submit a 7-day prior notice to OGRA for closure or stoppage of operations.
Finally, OGRA will have powers to direct any refinery, marketing company or its agent or dealer or a blending plant (or reclamation plant) to supply such quantity of any petroleum product to such person as may be specified in the order.
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