China has asked Pakistan to immediately clear $220 million in overdue payments owed to the Chinese energy company United Energy Pakistan (UEP).
The request was made through diplomatic channels after Pakistan’s ambassador in Beijing sent an urgent note. The dues are for natural gas supplied by UEP to the Sui Southern Gas Company (SSGC). UEP currently supplies around 260 to 270 million cubic feet per day (MMcfd) of gas to SSGC.
According to officials, the delay has created a serious liquidity problem for UEP. The company has already been forced to lay off some staff to cut costs. China warned that further delays could damage investor confidence and affect energy operations in Pakistan.
The Special Investment Facilitation Council (SIFC) has also called for an urgent solution. It stressed the need to protect the trust of foreign investors, especially Chinese companies working in Pakistan’s energy sector.
SSGC has explained that it cannot make the payment because it is waiting for large tax refunds from the Federal Board of Revenue (FBR). These refunds are worth billions of rupees.
This issue highlights the ongoing financial problems in Pakistan’s energy sector, including circular debt and payment delays. Experts say quick resolution is important to maintain good relations with Chinese investors and ensure steady gas supply for power and industry.
