Payment of outstanding dues: power sector's lukewarm response aggravates PSO woes

The cash-strapped Pakistan State Oil (PSO) financial woes further aggravated due to lukewarm response of power sector, as its receivables swelled to Rs 163.9 billion on Monday that may intensify oil and power crisis in the country.
The Finance Ministry had released Rs 28 billion to PSO against commitment of Rs 30 billion in second week of the on-going month keeping in view the critical financial situation of PSO, whose receivables against different clients mainly power sector piled up to Rs 169.18 billion on March 8, 2011.
Analysts are of the view that government should have chalked out a comprehensive plan immediately to resolve the circular debt issue once and for all. "Due to circular debt issue, Oil and Gas Development Company Limited (OGDCL) is also suffering from debt of oil refineries," they said, adding that once supply chain is disturbed, it will take around four months to recover.
After receiving Rs 28 billion, PSO receivables had declined to Rs 144.3 billion that again accumulated to Rs 163.9 billion on Monday that was still a big challenge for public sector entity. PSO is to make payment of Rs 48.9 billion to Kuwait Petroleum Corporation (KPC) and other international fuel suppliers for oil imports.
On February 17, 2011 PSO had also suspended supply of furnace oil to power-producing entities due to non-payment of dues. During the last meeting, the Finance Ministry had directed Pakistan Electric Power Company (Pepco) to make payment on monthly basis from its own bill collections to PSO in a bid to stop piling up of receivables. But PSO is facing problems to receive dues from power sector that is not paying dues from its bill collection to PSO.
As on March 28, 2011, PSO receivables against different clients stand as follow: WAPDA Rs 43.9 billion, Hubco Rs 74.015 billion, Kapco Rs 30.7 billion, PIA Rs 1.69 billion, OGDC Rs 266 million, KESC Rs 2.207 billion, financial charges from PIA Rs 1.017 billion, price differential claims (PDC) on High Speed Diesel (HSD) Rs 1.382 billion and PDC on imported PMG Rs 4.757 billion. PSO's payables stand as: Parco Rs 33.19 billion, PRL Rs 12.02 billion, NRL Rs 9.34 billion, ARL Rs 35.5 billion and Bosicor Rs 4.69 billion.