Finance ministry calls for gas supply to FFBL

ISLAMABAD: The Ministry of Finance has asked the Petroleum Division to allocate gas supply to the Fauji Fertiliser Bin Qasim Limited (FFBL) plant from a new discovery made by Pakistan Petroleum Limited (PPL). Earlier, the caretaker government approved an increase in the allocation of gas for third parties from 10% to 35% to tackle the growing circular debt and help exploration companies improve their cash flow. Exploration and production (E&P) firms have welcomed this initiative as they are trapped in circular debt due to delay in payments by the public gas utilities. They prefer third parties for gas supply where chances of stopping payments are very slim. In a recent letter sent to the Petroleum Division, the finance ministry said that the proposal of allocating 15 million cubic feet of gas per day (mmcfd) to FFBL from a new PPL discovery, ie, 100% allocation, may be re-examined in light of the recent amendments to the Petroleum (Exploration and Production) Policy, 2012, approved by the Council of Common Interests (CCI).