Mounting receivables put Pakistan's winter LNG imports at risk

Mortorists queue to refill their vehicles with Compressed Natural Gas (CNG) at a CNG station in Peshawar on September 16, 2021. (AFP/File)
Short Url
Updated 15 November 2022
Follow

Mounting receivables put Pakistan's winter LNG imports at risk

  • The state-owned energy company has to receive $2.7 billion from gas and power sector and other state entities 
  • Pakistani petroleum importers say banks are not opening LCs due to dollar shortage as central bank probes matter 

KARACHI: The growing liquidity crunch at Pakistani state-owned energy company, the Pakistan State Oil (PSO), has posed a threat to the country’s gas imports during winter, an expert said on Monday, after an unprecedented buildup of Rs615.652 ($2.7 billion) receivables. 

These receivables are owed by the Sui Northern Gas Company (SNGPL), Pakistan International Airlines (PIA) and the Generation Company (Genco-III) and Hub Power Company (Hubco), according to documents seen by Arab News. The Pakistani energy giant’s payables have also surged to Rs252.947 ($1.14 billion) as of November 13. 

Financial experts say with such huge receivables, PSO is left with less amount to import gas this winter season. 

“The net worst outcome of the liquidity crunch would be that the country will have to import lesser LNG cargoes during the winter,” Samiullah Tariq, research director at the Pakistan-Kuwait Investment Company, said on Monday. 

“However, it is expected that the company would arrange liquidity.” 

Pakistan, one of the fastest-growing markets for LNG, utilizes imported gas for power generation. 

Petroleum Minister Musadik Malik last week warned that people may face gas shortfall in winter, despite the availability of an additional 200 million cubic feet per day (MMCFD) of gas from January till February next year. 

Pakistani petroleum importers have been complaining that banks are not opening their Letters of Credit (LCs) due to a shortage of dollars. 

However, the central bank governor assured on Monday that LC cases of up to $100,000 would be resolved within a week. 

Pakistani commercial banks are suspected of exploiting the country’s low-reserve position through exchange rate manipulation. The central bank has launched an investigation into the matter, which is being expanded. 

“Our inspection team is working on this and by the end of this month it would be completed,” Jameel Ahmed, governor of the State Bank of Pakistan, said at an event at the Institute of Business Administration (IBA) on Monday. 

“We have focused on the banks, keeping in view the volume, which are more active in foreign exchange business.” 


Police lodge case over Karachi mall blaze under mischief, negligence and murder clauses

Updated 4 sec ago
Follow

Police lodge case over Karachi mall blaze under mischief, negligence and murder clauses

  • The fire broke out at the densely packed Gul Plaza in the heart of Karachi on Jan. 17 and has so far claimed 71 lives
  • Traders have estimated losses at $53.6 million, while the government has announced $35,720 for family of each victim

ISLAMABAD: Police in Pakistan’s southern port city of Karachi have registered a case over a deadly blaze at Gul Blaza, which has so far claimed 71 lives, under mischief, negligence and murder clauses, a senior police official said on Saturday.

The fire broke out at the densely packed commercial complex in the heart of Karachi on Jan. 17, trapping workers and shoppers inside. It burnt for over 24 hours before being brought under control, leaving the building structurally unsafe.

Authorities have not yet confirmed the cause of the fire. Police said preliminary indications pointed to a possible electrical short circuit, though officials stress conclusions will only be drawn after investigations are completed.

A week after the incident, police have registered the first information report (FIR) of the incident under sections 427, 436, 337-H (i) and 322 of the Pakistan Penal Code, according to Deputy Inspector General (DIG) Karachi South Asad Raza.

“The FIR of the Gul Plaza tragedy has been registered under the government’s prosecution, with case number 08/2026 at Nabi Bux police station,” Raza told Arab News.

Section 427 relates to mischief causing damage, 436 concerns mischief by fire or explosive substance, 337-H (i) details punishment for rash or negligent act, and 322 details punishment for homicide.

Deadly fires are a recurring problem in Karachi, a city of more than 20 million people, where overcrowded markets, aging infrastructure, illegal construction and weak enforcement of safety regulations frequently contribute to disasters. Officials say a blaze of this scale is rare.

Identification has been significantly slowed by the condition of the remains recovered from the site, Syed said, noting that many bodies were found in fragments, complicating DNA analysis and prolonging the process for families waiting for confirmation.

Traders have estimated total losses from the fire at up to Rs15 billion ($53.6 million). The Sindh provincial government this week announced compensation of Rs10 million ($35,720) for the family of each person killed in the blaze and said affected shopkeepers would also receive financial assistance.

Separately on Saturday, the Muttahida Qaumi Movement-Pakistan (MQM-P) party urged Prime Minister Shehbaz Sharif to constitute an inquiry commission to hold those accountable whose negligence led to the Gul Plaza inferno.

“Incapability, mistake, apathy, shamelessness, impudence — these should be exposed,” MQM-P’s Farooq Sattar said, calling for an “independent judicial inquiry” into the Gul Plaza tragedy to ensure the truth comes to light.

LAHORE HOTEL FIRE

Meanwhile, a fire erupted at a hotel in the eastern city of Lahore in Pakistan’s most populous Punjab province, according to Rescue 1122 service.

Six people were injured due to the blaze at the hotel in the city’s Gulberg area who were shifted to hospital.

“All necessary steps be taken to quickly control the fire, instructions,” Deputy Commissioner Muhammad Ali Aijaz directed authorities. “Immediate evacuation of all people from the building be ensured.”