The Pakistan State Oil (PSO) has reportedly made cash payment mandatory for additional furnace oil supply to the defaulting independent power producers (IPPs), sources told Business Recorder.
PSO took this decision subsequent to the request by the IPPs to the Minister for Petroleum and Natural Resources Naveed Qamar to direct PSO to immediately supply additional RFO on credit to thermal power station Muzaffargarh, steam thermal power station Faisalabad, Saba Power, Japan Power and Sepcol where ample storage capacity is available.
Floods have also impacted negatively on the power sector including independent power producers, particularly Kapco, AES Lalpir, and AES Pakgen. Sources said that PSO Lalpir and Mehmoodkot depots are totally submerged. Lalpir depot is the prime feeder of Kapco and AES whereas Mehmoodkot is the major source of supply to upcountry and Northern Areas.
PSO pointed out that due to flooding at Lalpir all vehicles carrying LSFO did not decant at Lalpir depot and it requested direct decantation at Kapco complex. As of August 12, 2010, sources said that 476 vehicles containing approximately 19,500 tons of LSFO are stuck in the outskirts of Lalpir, Kot Addu and Multan. In addition, three oil tankers are in the same scenario. Kapco officials say that decantation work has been started at Kapco and 10 tank lorries have decanted at Kapco complex.
To overcome the situation, PSO has devised a plan to supplement the entire upcountry product movement through PSO Karachi terminals which are working ceaselessly/over-capacity, day and night, to accommodate the increasing load, sources added. "We have already maximised our supplies to TPS Muzaffargarh, Faisalabad and Jamshoro. Similarly, PSO is supplying product to Gul Ahmad Energy, Tapal Energy, KESC, Sepcol, Saba as per demand and financial arrangements", sources said.
They said that upcountry product movement from Karachi is now subject to road access affected due to flooding and provision of railway tanks/wagons/ locomotives. PSO states that it is ready to enhance dispatches to the IPPs but the plan can not materialise until the power companies make cash payments, especially Saba, Kohinoor, Sepcol and Japan. According to PSO, the massive existing defaults of the power sector are compromising its ability to pay its local and international supplier.
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