PSO receivables swell to Rs153b

Oil marketing company itself owes Rs131 billion.

KARACHI: Pakistan State Oil (PSO) has communicated to the ministry of water and power and ministry of petroleum and natural resources that the company is once again in dire financial straits. A letter forwarded to the ministries indicates that inter-corporate debt due to non-payment of dues by various institutional buyers has swelled to Rs153.56 billion.

The letter cites that receivables from independent power providers Hub Power Company (Hubco) and Kot Addu Power Company (Kapco) have piled up to Rs62.1 billion and Rs26.4 billion, respectively. Meanwhile, the amount due from the Water and Power Development Authority (Wapda) has risen to Rs53.7 billion.

“Repeated attempts to communicate with the management of Hubco and Kapco have failed to get them to clear their mounting dues or formulate a repayment plan,” contended a PSO official.

The document also cites that Oil and Gas Development Company owes the oil marketing giant Rs427 million and the Karachi Electric Supply Company Rs1.51 billion.

Meanwhile, PSO itself owes Rs131.41 billion to refineries and other suppliers, including Rs42.26 billion required to clear lines of credit.

Oil imports halted

PSO has decided to stop issuing new tenders for the import of furnace oil until it receives payments to bring down outstanding dues.

The Express Tribune has also learnt that the company has delayed awarding tenders for light sulphur fuel oil (LSFO) as well as high sulphur fuel oil (HSFO) and has requested foreign suppliers to extend the price validity of these tenders.

“This action has been taken due to the absence of any payment plan from the ministry of water and power,” said PSO’s official spokesperson, adding that the oil marketing company has been corresponding with the power sector to formulate a payment plan but there have been no commitments so far.

“Gas outages in winter increase furnace oil demand by about 20 per cent,” said the official. “If PSO remains unable to import furnace oil, the current power crisis could become much more serious.”

Published in The Express Tribune, October 30^th, 2010.