PSO seeks release of Rs89 billion

Company officials will meet finance ministry to resolve issue.

KARACHI: Prime Minister Yousaf Raza Gilani has directed the finance ministry to resolve the issue of surging inter-corporate debt in the power sector and help bail out Pakistan State Oil (PSO), The Express Tribune has learnt through a reliable source.

PSO Managing Director Irfan Qureshi met with the prime minister on Friday to apprise him of the mushrooming inter-corporate debt in the power sector. “Qureshi informed the premier that the company is in dire financial straits due to non-payment of outstanding dues by the power sector,” said the source.

PSO has requested the government to release at least Rs89 billion immediately to Pakistan Electric Power Company (Pepco), so that it may in turn clear its dues with PSO. Senior management of the country’s biggest oil marketing company is also expected to meet with finance ministry officials, in an attempt to hammer out a solution to the persisting debt cycle between oil refineries and marketing companies, power generation and distribution companies and their institutional clients.

“Supply of furnace oil to Hub Power Company (Hubco) as well as Kot Addu Power Company (Kapco) will remain suspended till at least Monday,” said a PSO official, adding “there is expectation that both independent power providers will make some payments in the coming week, as well as share a payment plan for clearing their outstanding dues.”

Furnace oil supplies from PSO to Hubco, Kapco and Water and Power Development Authority (Wapda) were suspended on Thursday morning, however, by evening, supplies to Wapda were restored after intervention of the Ministry for Water and Power.

Published in The Express Tribune, February 19^th, 2011.