PSO cannot supply subsidised oil to KESC
Pakistan State Oil (PSO) has expressed its inability to supply furnace oil at a subsidised rate to the Karachi Electric Supply Company (KESC), citing financial constraints.
“We cannot supply furnace oil at the subsidised rate as our receivables from the government under the Price Differential Claim (PDC) have increased to around Rs4.1 billion,” said a PSO spokesperson.
The spokesperson brushed aside media reports that PSO - the oil marketing giant having around 70 per cent market share - has stopped furnace oil supply to the KESC.
The official said that the PSO was supplying around 27,000 tons of furnace oil a month to the KESC at a subsidy of 71 per cent of the cost.
Initially, it supplied furnace oil under this arrangement from December to February and then from May onwards.
However, the spokesperson said that normal supplies of 33,000 tons of furnace oil to the KESC would continue and there would be no interruption in it. “PSO’s total receivables under the inter-corporate debt has swelled to Rs137 billion.”
KESC spokesman, when contacted, said the PSO has not stopped the supply of furnace oil and power generation and transmission is going on smoothly.
“Our payables to the PSO have not exceeded the credit ceiling of Rs2 billion and we have not defaulted on our payments,” he said.
According to reports, Prime Minister Yousaf Raza Gilani, in a special meeting on Tuesday, announced that the government would provide an immediate financial relief to the PSO by paying Rs41.4 billion. The finance ministry would arrange Rs31.4 billion while the Pakistan Electric Power Company (Pepco) would pay Rs10 billion.
The inter-corporate debt problem, engulfing refiners, oil marketing companies and power producers, has been haunting the government for a couple of years.
In an energy summit held in May in Islamabad, the government committed to clear Rs116 billion of the debt to ensure smooth operations of companies of the energy sector.
The World Bank and the Asian Development Bank, under their loan programmes, have also asked the government to control the inter-corporate debt problem.
Published in the Express Tribune, June 16th, 2010.
“We cannot supply furnace oil at the subsidised rate as our receivables from the government under the Price Differential Claim (PDC) have increased to around Rs4.1 billion,” said a PSO spokesperson.
The spokesperson brushed aside media reports that PSO - the oil marketing giant having around 70 per cent market share - has stopped furnace oil supply to the KESC.
The official said that the PSO was supplying around 27,000 tons of furnace oil a month to the KESC at a subsidy of 71 per cent of the cost.
Initially, it supplied furnace oil under this arrangement from December to February and then from May onwards.
However, the spokesperson said that normal supplies of 33,000 tons of furnace oil to the KESC would continue and there would be no interruption in it. “PSO’s total receivables under the inter-corporate debt has swelled to Rs137 billion.”
KESC spokesman, when contacted, said the PSO has not stopped the supply of furnace oil and power generation and transmission is going on smoothly.
“Our payables to the PSO have not exceeded the credit ceiling of Rs2 billion and we have not defaulted on our payments,” he said.
According to reports, Prime Minister Yousaf Raza Gilani, in a special meeting on Tuesday, announced that the government would provide an immediate financial relief to the PSO by paying Rs41.4 billion. The finance ministry would arrange Rs31.4 billion while the Pakistan Electric Power Company (Pepco) would pay Rs10 billion.
The inter-corporate debt problem, engulfing refiners, oil marketing companies and power producers, has been haunting the government for a couple of years.
In an energy summit held in May in Islamabad, the government committed to clear Rs116 billion of the debt to ensure smooth operations of companies of the energy sector.
The World Bank and the Asian Development Bank, under their loan programmes, have also asked the government to control the inter-corporate debt problem.
Published in the Express Tribune, June 16th, 2010.