PSO supplied 19,000 tons of oil daily from May 10 to May 12 to overcome the power crisis, in line with directives issued by the interim prime minister. PHOTO: FILE
As Pakistan perseveres through one of the worst energy crises in its history, the Ministry of Petroleum has warned that power shortages may worsen in the summer season, troubling those who wish for some respite in the near future. The ministry cites a severe shortage of fuel oil for the impending shortfall, as suppliers move to cut off provisions due to the nonpayment of past dues.
Due to failures in effectively managing energy supply and demand, Pakistanis currently face 12-18 hours of load-shedding on a daily basis in most parts of the country.
Pakistan State Oil (PSO) – the nation’s largest oil marketing company – has reportedly been striving to make sure that the supply chain for ‘white oil’ is not be affected by the liquidity crisis. However, nonpayment of dues by the power sector has started affecting the supply chain despite its efforts.
Sources told The Express Tribune that the Ministry of Petroleum secretary, in a letter sent to the Ministry of Water and Power on May 10, categorically stated that PSO’s ability to maintain uninterrupted supply of fuel to the power sector has been seriously compromised due to the nonpayment of its dues.
“This is likely to result in a severe shortage of fuel oil in the summer months, as PSO will not be able to import an adequate quantity due to its default [on commitments] with international and local banks,” the petroleum secretary had said. He explained the situation was quite critical and needed immediate and personal attention from the Ministry of Water and Power. He had urgently requested immediate release of funds to save PSO from any further delinquencies.
The petroleum secretary revealed that the Finance Division had released Rs10 billion for PSO, but two power plants – Hubco and Kapco – had deducted Rs1.4 billion from the amount released.
“Timely release of funds is absolutely essential for the retirement of letters of credit and maintaining steady supplies of fuel,” he reiterated. The Ministry of Petroleum had been persistently requesting the Ministry of Water and Power and the Ministry of Finance to release Rs8.5 billion for the payment of a letter of credit due on May 10, and another Rs5.6 billion for the payment of a letter of credit due on May 13. “So far, PSO has been financing its fuel oil letter of credits from white oil receipts, which is resultantly affecting the white oil supply chain,” he said.
Election arrangements
For the three days from May 10 to May 12, PSO supplied 19,000 tons of oil daily to overcome the power crisis, in line with directives issued by the interim prime minister in preparation for election day.
The petroleum secretary also revealed that Sui Northern Gas Pipelines (SNGPL) had provided 152 million cubic feet per day (mmcfd) gas to four independent power producers – Orient, Saif, Sapphire and Halmore – in the light of decisions taken in a meeting held at the Ministry of Finance on May 4. In addition to that, SNGPL also provided 42mmcfd gas to Rousch Power after the receipt of Rs1 billion.
“Four independent power producers who are cash customers – AES Lalpir, Pakgen, Atlas and KEL – were supplied oil on credit following the decisions taken in the meeting held in the Ministry of Finance,” he added.
Published in The Express Tribune, May 19th, 2013.
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True that Humayun