PSO warns of severe shortage of POL products: Rs 50 billion immediately needed to avert crisis

The cash strapped state run oil marketing company, Pakistan State Oil (PSO), has warned of a severe shortage of petroleum products in June if the Finance Ministry does not immediately arrange Rs 50 billion for the company, Business Recorder has learnt.
Sources in Finance Ministry revealed that PSO Managing Director (MD) Irfan K. Qureshi had written a letter to Advisor to the Prime Minster on Finance, Dr Abdul Hafeez Shaikh to draw his attention towards the imminent energy crisis that is looming large due to liquidity crunch the company is facing at present.
"In order to meet the energy demand of the country we request your help for an immediate release of Rs 50 billion to PSO. Your timely and kind attention will help avert a major crisis in the oil and power sector of the country," he maintained. MD PSO has expressed his inability to ensure supplies of petroleum products including Mogas, High Speed Diesel (HSD) and jet fuel as local refineries had reduced their output.
"In case of default of L/Cs, supply chain breakdown will take at least four months to restore," he said, adding that PSO receivables have crossed Rs 120 billion. "We would like to highlight that during the month of April and May 2010, we have supplied fuel oil worth Rs 42 billion to Wapda, HUBCO and Kapco against total payments of Rs 27 billion," MD added. Wapda has paid Rs 8 billion, Hubco Rs 10.57 billion and Kapco Rs 8.5 billion.
He said that Pakistan Electric Power Company (PEPCO) did not pay any of its dues to PSO from its collection from 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," Qureshi said, adding that PSO is paid only when the government injects cash into the power sector, which is not a sustainable situation.
As on May 17, the total receivables of PSO against different clients stood at Rs 127.2 billion which are as follow: Wapda at Rs 49.6 billion, Hubco Rs 44.5 billion, Kapco Rs 20.2 billion, PIA Rs 1.11 billion, OGDC Rs 465 million, KESC Rs 1.85 billion, Power holding co Rs 1.3 billion, audited price differential claims on HSD Rs 1.38 billion, price differential claims on imported PMG Rs 2.9 billion and price differential claims under gas load management plan (KESC) at Rs 2.8 billion.