A SSGC spokesman said that the Pakistan Steel Mills (PSM) owes over Rs. 17 billion to SSGC while KESC owes more than Rs. 50 billion.A0 It is quite clear that SSGC sells gas to KESC which is legally bound to pay the gas utility for the amount of gas it purchases, he further added.
While, since July 2013, KESC has made some efforts in settling its dues, it still has a long way to go. Outstanding receivables from large gas consumers mean that the Company is incurring substantial interest on over dues. This situation has made it difficult for the Company to make payments for purchase of gas from local and foreign E&P companies and also to maintain healthy day to day operations of the Company, the spokesman reiterated.
Despite the fact that the only Gas Sales Agreement between the two companies was for the supply of 10 mmcfd gas, SSGC has been supplying a maximum of 220 mmcfd gas to KESC only because the gas utility does not want people of Karachi to suffer.