The Ministry of Water and Power and Pakistan State Oil (PSO) are scrambling to get funds released to streamline power and oil supplies in a bid to tackle the electricity crisis that has paralysed life and sparked protests across the country.
According to sources, the water and power ministry has approached the finance ministry, seeking the immediate release of Rs10 billion for arranging oil for power plants to step up production.
“As receivables of state-owned PSO accumulate to Rs224.5 billion, it has sent SOS (save our souls) calls to the president, prime minister and finance ministry, pressing them to release Rs12 billion every week to ensure continuous oil supply to power companies,” a senior official of the petroleum ministry said.
He said the receivables of PSO were at an all-time high while its payables to local and international fuel suppliers exceeded Rs183 billion. However, no action had been taken so far in response to PSO’s letter sent on June 25.
According to the official, Prime Minister Raja Pervaiz Ashraf has directed PSO to supply oil on seven-day credit to independent power producers (IPPs) and state-owned electricity generation companies, but the power companies were not making timely payments. “PSO received Rs4.7 billion on June 27 but since then no other payments have been made,” he said.
PSO had cautioned the government that a furnace oil shortage could result, if money was not arranged by June 29. “But no major amount was released,” the official said.
Because of a slowdown in oil supply, power production has gone down, sparking widespread load-shedding across the country.
An official of the water and power ministry pointed out that the finance ministry was reluctant to clear the tariff differential claims, leading to a sharp rise in circular debt.
Poor recovery of bills by power distribution companies was also part of the problem, which contributed to the circular debt. Power companies receive 81% of the billed amount, suffering a loss of Rs7 billion every month.
Published in The Express Tribune, July 4th, 2012.
More in BusinessPrime minister meets with top officials of economic team