The reliance on the government by some businesses — assumed in the shape of a bailout during times of distress — often turns out to be misplaced, particularly when the problem is self-created and not an outcome of adverse economic conditions or wrong official policies.
However, there is a case for looking into the deteriorating economic environment for manufacturing and the industry’s general complaint that the government tends to promote trading or speculative activities at the cost of manufacturing, which has led to de-industrialistion over the past few decades.
Byco Industries Incorporated (BII) — an integrated oil company set up with an investment of $500m — is in distress. It attributes its problems partially to the government and seeks its help in order to ride through its cash flow issues.
The hierarchy in the ministry of petroleum and natural resources acknowledges the company’s potential, but said nothing to suggest that any bailout is even being considered by the government at this point of time.
“They keep on sending claims. However, their demands to arrange cash flows from the government are not justified,” said Naeem Malik, a petroleum ministry spokesperson.
“Byco’s performance has improved over the past year. All it needs is to aggressively focus on arranging cash flows from the market to ensure a steady supply of crude to its refinery, meet its market commitments and emerge as a dependable source of supply of oil products,” he added.
The oil company, however, is not comfortable with that stance, and believes that the government accommodates the interests of oil marketing companies (OMCs) at the cost of refiners.
