Bid to avoid default on LC: PSO defers 60,000 tons of furnace oil shipment

The Pakistan State Oil (PSO) has deferred the tender of a shipment, carrying 60,000 tons furnace oil, for two weeks, which was planned for the current month, to avoid default in retiring the Letter of Credit (L/C), Business Recorder has learnt. Industry sources said that the shipment was to have arrived by the last week of the current month.
In addition to deferring shipment, PSO has planned import of 270,000 tons fuel for the current month to meet the requirements of the country. "Local refineries are also expected to produce 250,000 tons fuel to meet the requirements of the current month," they added.
According to sources, total stock of fuel oil in the country is more than 300,000 tons, which is sufficient to meet the country''s power generation requirements for 18 days. "Most of these stocks are held by PSO and Pepco," they said, adding that currently the stock level at IPPs is low, considering the consistent non-payment of dues.
"Since PSO is over-burdened by circular debt, which stood at Rs 68.864 billion against power sector, the import plan for the current month has been revised, and the last tender of fuel oil for the month of January has been deferred for two weeks to avoid default in retiring the international LCs," sources said.
PSO''s total receivables against power sector and other clients are as follows: Wapda Rs 32.15 billion; Hubco Rs 24.97 billion; Rs 12.19 billion Kapco; Rs 1.82 billion PIA; Rs 565 million OGDC; Rs 1.3 billion Power Holding Co; Rs 835 million financial charges on PIA; audited price differential claim Rs 1.59 billion; and price differential on imported PMG Rs 2.089 billion.
Refineries are to receive Rs 59.4 billion from PSO, as follows: Rs 21.56 billion Parco; Rs 11.38 billion PRL; Rs 8.831 billion NRL; Rs 12.43 billion ARL; and Rs 4.85 billion Bosicor. PSO is to make payment of Rs 10.088 billion to Kuwait Petroleum Corporation (KPC) by January 25. "The amount of Rs 16.504 billion on account of L/C payment for import is due on January 21," sources added.