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| Senate body urges govt to clear PSO dues |
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Tuesday, January 06, 2009
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KARACHI: Senate Standing Committee on Petroleum and Natural Resources has recommended the government to clear the dues of Pakistan State Oil (PSO) as soon as possible so that it can buy and supply fuel to power generation companies.
This was stated by the Chairman Senates Committee Senator Syed Dilawar Abbas after presiding over a marathon meeting which reviewed the performance of PSO and availability of petroleum products on Monday.
He said that the circular debt of premier oil marketing company has piled up to more than Rs73 and its banks borrowing touched Rs22 billion, affecting its profitability. He said that payment of outstanding amount will enable PSO to buy petroleum products and ensure availability of petrol, diesel and furnace oil in the country and operate like an efficient corporate entity.
Senator Abbas said that the committee has also asked PSO to curtail expenses keeping in view the economic situation in the country and enhance its market share to improve its profitability. He maintained that despite cut in margin and huge circular debt, PSO has maintained its market share and performed well.
He said that PSO has imported 25,000 tonnes of motor spirit to meet local demand as oil refineries ran under capacity due to financial crunch. PSO supplied 10,000 tonnes of motor spirit to other OMCs for distribution and marketed 15,000 tonnes through its own network, he added.
Abbas pointed out that PSO has also sustained an inventory loss of Rs14 billion due to plummeting oil prices, yet it is a good company. Responding to a question, he said that the committee has also recommended Prime Minister Yousuf Raza Gilani at a special session that the government should have a regular review of energy position in the country and pass on the benefit of oil price cut to the consumers.
He said Senates committee has also suggested the government to expedite work on IPI gas pipeline on urgent basis as the country will face gas production shortage by the end of next year.
Abbas pointed out that the government needed to recover Rs290 billion which were paid as subsidy to freeze oil prices in the country. Only a portion of this amount has been left now, he added.
To a question, he said that there were possibilities for downward revision of petrol prices and the government can still lower petrol prices by 6 per litre in next three to four months. Talking about the CNG prices, Abbas said that gas prices are linked to oil prices and gas prices should be lowered when oil prices have dropped harshly.
Replying to a question, Senator Abbas said that Senate Committee has always opposed privatisation of strategic energy resources like Qadirpur gas field and OMC like PSO. We are opposing privatisation of PSO for the last two years, he opined.
Senator Rukhsana Zuberi said that OGDC must take lead in oil exploration in five allocated fields which have been cleared by the security agencies for exploration.
She said the 90 per cent of recommendations of Senate committee have been accepted. She said that 10 deemed duty must be withdrawn as oil refineries have not fulfilled their commitments regarding enhancing capacities and value addition in their products.
Zuberi said that petroleum policy will be presented before the cabinet on January 8, 2009. Replying to a question on LPG prices, Senator Dilawar Abbas said that custom duty should be removed to encourage the import of liquefied petroleum gas in the country. He said Senate committee has recommended the government to reduce sales tax on petroleum products from 16 per cent to 7.5 per cent.
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