ISLAMABAD: The government and the opposition traded barbs in the Senate over burgeoning external debt, with the opposition chiding the government for setting a new record and the government holding the previous rulers responsible for economic woes.
Conceding that the external debt had risen from Rs25 trillion over the last three years to nearly Rs40 trillion at present, Minister of State for Parliamentary Affairs Ali Mohammad Khan said the external debts stood at Rs6 trillion in 2008 which was taken to Rs25 trillion by the previous Pakistan Peoples Party and Pakistan Muslim League-Nawaz governments.
“Imran Khan could not have said he will not pay back loans obtained by those linked with Panama and Swiss accounts,” the minister remarked.
He said the total public debt had increased by Rs14.9 trillion during the past three years, out of which 50 per cent (Rs7.46 trillion) was due to interest payments to lenders. He explained that Rs4 trillion was used for cash buffer while rupee devaluation added Rs3 trillion to the debt burden.
PPP blasts PTI over ‘mismanagement’ of gas sector and its ‘unconstitutional’ distribution
Justifying devaluation of rupee, the minister said former finance minister Ishaq Dar had artificially maintained dollar rate that had been made market based with a free flow rate. He pointed out that Miftah Ismael had reversed Dar’s policy during the last year of the PML-N government.
He said the Pakistan Tehreek-i-Insaf government was taking necessary steps to ensure fiscal discipline, consolidate and stabilise the economy, and accelerate growth.
He asserted that the government debt was on a firm downward trajectory whereby the debt-to-GDP ratio had decreased by 4 per cent during FY2020-21 while it was expected that the ratio would drop further by two to three per cent during this fiscal year.
On a medium term, he said, government’s objective was to ensure gradual reduction in fiscal deficit that would subsequently reduce country’s reliance on additional debt.
Later, the government came under fire in Senate over countrywide gas crisis.
Speaking on a calling attention notice on the ongoing crisis in the gas supply to consumers, both domestic and commercial, Parliamentary Leader of the PPP in the Senate Senator Sherry Rehman deplored that the crippling deficits, the spiralling prices and unconstitutional distribution of gas to the provinces in Pakistan had reached unprecedented levels.
She said the government continued to maintain its indefensible position on mismanagement of the gas sector and its iniquitous distribution in Pakistan. Hiding behind one ‘false talking point’ of international gas prices and energy shortages, in drawing comparisons to countries with much stronger currencies, higher per capita incomes and purchasing power, shows that the government had no plan to overcome the crisis as a harsh winter looms ahead, she remarked.
In the past three years, she said, the price had registered an incomprehensible increase of 350 per cent that had become unaffordable for middle class domestic and industrial consumers.
The PPP leader said the government appeared to have no plan to tackle the crisis as it had taken an ad hoc approach that had led the power sector into a terrible paralysis.
She regretted that the gas was actually unavailable in homes and factories due to government’s baffling incompetence and non-transparent spot buying deals — all contracted too late every year to manage supply across the country.
“No one has answered the basic question as to why the government could not manage the purchase of Liquefied Natural Gas in the summer at 1/3 the rates. The price of gas today is also naturally related to the LNG fiasco and its shortage,” she said. The government purchased LNG cargoes at the historic high price of $30.6 per million British thermal units (mmbtu) at present, she said, adding that it was being sold at $13 per mmbtu in the summer. “They did not purchase or book cargoes when all other countries were doing it in the summer at much lower rates. Even in October they purchased LNG cargoes at a record price of $20.29 per mmbtu. All this could have been avoided had they ordered it at the right time which is the common practice but surprisingly not just the regulator, OGRA has remained silent on this, but so has NAB, when clearly an inquiry is needed into such criminal negligence. Long, inexplicable delays in the import of LNG spot cargoes caused massive losses worth Rs10.6b to the Pakistani taxpayer for just FY21….,” Senator Rehman said.
“There is still no explanation for why both the recent LNG suppliers they had contracted with had defaulted and refused to fulfil their contractual obligations. It is the government’s fault that they gave LNG contracts to defaulting firms. Why didn’t they do their due diligence and where is the NAB inquiry into this crisis? Why were purchasing rules not followed?” she asked while discussing the LNG scandal.
The PPP senator also raised the issue of iniquitous supply and said shortage in gas supply had hit Sindh particularly hard. She referred to Article 158 of the Constitution stating: “The province in which a wellhead of natural gas is situated shall have precedence over other parts of Pakistan in meeting the requirements from the wellhead, subject to the commitments and obligations as on the commencing day.”
Senator Rehman said the federal government was not only clearly violating the Constitution by depriving Sindh of its due share, it was also constantly messaging its ill intent of lowering supplies to the province that pays the highest business taxes and sends out high exports .
‘Gas supply thrice a day for cooking only’
While responding to the calling attention notice, Minister for Energy Hammad Azhar said the government plans to “provide uninterrupted gas to domestic consumers three times a day for cooking only” during winter in a move to meet gas shortage in the country. He said uninterrupted supply of gas at the time of breakfast, lunch and dinner would be ensured.
The minister made it clear that the country’s gas crisis had nothing to do with LNG import. Gas supply network had significantly depleted as the consumption of gas increased by threefold in winters, he reasoned.
He recalled that the PPP government had put a moratorium on new gas domestic gas connections in 2011 but the PML-N government lifted it, leading to a massive jump in number of consumers.
Talking about government’s efforts to deal with gas crisis, the minister said talks with Russia on a gas pipeline project were moving forward, and hoped for an early conclusion of an agreement.
Published in Dawn, November 13th, 2019