KARACHI: The financial situation of Sui Southern Gas Company (SSGC) is worsening mainly due to non-payment of outstanding dues by the Pakistan Steel Mills (PSM).
An SSGC spokesperson, in a statement, said that there is no other choice but to disconnect gas supply to the PSM as the steel mills owed Rs8.3 billion to SSGC in July 2012 and by July 2013 the amount had shot up to Rs15 billion. Since then the outstanding amount is increasing uncontrollably and at present, PSM’s liabilities stand at Rs35 billion, he added.
“This is a major concern for SSGC since it has made it increasingly difficult for the company to make payments to local and foreign exploration and production companies for the purchase of gas as well as to meet other commitments,” the spokesperson said. “If this situation persists, the gas utility may be forced to default on payments.”
In another notice in August, the company asked the mill to take necessary steps to arrange for the payment of outstanding bills on or before August 15. The notice said in the event of failure, SSGC would be compelled to not only discontinue the delivery of gas, but also cancel the sale agreement.
