PSO restores furnace oil supply to power sector: Minister promises to pay Rs 24.7 billion

The Pakistan State Oil (PSO) has restored furnace oil supply to Hubco and Kapco, on credit basis, after the Minister of Water and Power, Pervez Ashraf, pledged to provide Rs 24.7 billion to it, Business Recorder has learnt.
PSO management had discontinued fuel supply to power sector, on credit basis, from Sunday night, due to rising receivables, which accumulated to Rs 142 billion, due to non-payment by the power sector.
Sources said that piecemeal payments had not resulted in resolving the issue as the recent promised amount would help PSO ease a bit its financial woes for a few days. "Payments should be made continuously, and payment plan be given to PSO for future fuel supplies," sources said, adding that all pending dues against the power sector, and other consumers, should be cleared to enable PSO to arrange fresh fuel deliveries.
"The Minister of Water and Power has assured PSO to provide Rs 17 billion in the current week, followed by another tranche of Rs 7.6 billion in the next week, on account of fuel supply to the power sector," sources said, adding that the Finance Ministry had released Rs 30 billion to the Water and Power Ministry, which released nothing out of it to the PSO.
PSO is struggling from pillar to post to arrange financing to continue fuel supply across the country. In a recent meeting of energy summit, no strategy was chalked out to clear PSO''s dues. The power sector is the major defaulter of PSO. "PSO had written many letters to concerned ministries and the power sector to manage financing, but no one is ready to pay attention to the serious issue, which might result in collapse of oil and power sectors in the country," sources noted.
Due to the financial crunch, PSO has also deferred the upcoming furnace oil tenders for the period of September-October 2010, which might lead to oil shortage for power sector.
Sources said that power sector did not pay any amount to PSO from its collection from the consumers. "This is a serious concern for PSO that despite substantial increase in electricity tariff, power sector is unable to pay even for current supplies," sources said, adding that PSO is only being paid when government injects cash into the power sector, which is not a sustainable situation.