Pro IQRA News Updates.
ISLAMABAD: Oil and Gas Development Company Ltd (OGDC) has clarified that it is yet to receive any official communication from the relevant authorities regarding the issue of circular debt settlement.
The company made this statement in response to recent news articles discussing circular debt settlement plans. According to Business RecorderThe OGDC board held meetings on August 10 and August 17 to address the issue.
In a communication to the Pakistan Stock Exchange (PSX), the OGDC stressed that as of this date there has been no formal communication from the authorities. The company warned stakeholders and the public to rely solely on official communications for accurate information, suggesting that any information about a settlement plan could be speculative.
This clarification followed reports that the previous government had shared a draft plan to reduce the gas sector’s circular debt with the International Monetary Fund (IMF). The plan will reportedly involve adjustments to the cash book and tariff rationalizations, subject to the IMF’s agreement. Expectations of a resolution of the circular debt issue had caused increases in the share prices of OGDC and PPL, which subsided after the company’s clarification.
The circular debt problem has been a significant challenge in Pakistan’s power sector, burdening the government financially. Although tariff increases have been implemented, the debt build-up continues. Apart from addressing the circular debt issue, the OGDC’s notice also mentioned the approval of hiring an EPCC contractor for the KPD-TAY compression project. The company expressed its commitment to domestic development, self-reliance and supporting the domestic economy through local resources and technologies, including minimizing exports and helping to improve the balance of trade.
Read more: Circular debt rises to Rs2.31 tr