Ali, accompanied by key ministers including Murtaza Solangi, the Ministerfor Information, Dr. Shamshad Akhtar, the Minister for Finance, and EjazGohar, the Minister for Commerce, made a startling revelation. He disclosedthat the circular debt plaguing the gas sector had reached a staggeringRs2,700 billion, and this debt was increasing at an alarming rate of Rs350billion annually.
The gravity of this situation was emphasized by the fact that explorationof gas and petroleum had considerably decreased, resulting in losses of$3.5 billion. The dire need for action was evident, and Ali outlined plansto open bidding for onshore blocks in November, along with 24 offshoreblocks for exploration. However, he acknowledged that security concerns,pricing issues, and the mounting circular debt were formidable obstacles inthe path of accelerating oil and gas exploration.
Ali’s statement highlighted a stark reality: the pricing mechanism for gasand petroleum had to be revised upwards as an essential solution to thismounting crisis. He underscored that nearly 70 percent of the accumulatedcircular debt of Rs2,700 billion remained unpaid to exploration companies,further exacerbating the sector’s woes.
The looming question of relief in electricity bills was also addressed bythe Minister for Energy, who revealed that they awaited approval from theIMF, with an expected relief announcement in the coming week. Aliemphasized that these challenges couldn’t be resolved overnight, andconsequently, gas prices would need to be increased, forcing the nation torely more heavily on imported fuel.
Dr. Shamshad Akhtar weighed in on the economic front, describing themacroeconomic situation as challenging. She highlighted that thegovernment’s economic strategy aimed to boost domestic resourcemobilization to steer the economy in these turbulent times.
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Part of this strategy involved a restructuring of the Federal Board ofRevenue (FBR), with the Special Investment Facilitation Council (SIFC)tasked to propose reforms for the FBR. Furthermore, cost-cutting measureswere on the horizon to reduce the fiscal deficit. State-owned enterprisesgrappling with losses and mounting debt were expected to secure debtthrough capital markets, and government securities would be sourced throughstock markets, aiming to deepen and diversify the financial markets.
These measures underscored the government’s commitment to navigate thetreacherous economic waters and bring stability to the nation’s finances
