Attock Refinery (ARL) has refused to resume oil supply to Pakistan State Oil (PSO) on credit, Business Recorder has learnt. ARL Chief Executive Officer (CEO) Adil Khatak in a meeting chaired by Secretary, Petroleum, Imtiaz Qazi, on Monday categorically stated that ARL, as private sector entity, could not afford the burden of accumulating receivables on its balance sheet.
PSO Executive Director (ED) Finance Yaqoob Sattar also attended the meeting. "Huge ARL's receivables against PSO are damaging the image of the refinery," Khatak said, adding that fuel supply to PSO could only be resumed on cash payment. He added that ARL's Board of Directors (BoDs) was reluctant to resume oil supply to PSO on credit.
Officials in the meeting pointed out that ARL was to receive Rs 36 billion from PSO, whereas it was withholding Rs 40 billion payable to the Oil and Gas Development Company (OGDC), Pakistan Petroleum Limited (PPL), Mari Gas Company Limited (MGCL) and an amount on account of discount on crude oil and Petroleum Levy (PL) on petroleum products.
Khatak told Business Recorder: "We have informed Petroleum Secretary that fuel supply to PSO would only be made on cash payment as ARL, being a private sector refinery, can not afford accumulating receivables." He said that ARL had resumed supply of jet fuel and petrol on Monday to PSO, on cash payment. "However, we have asked PSO to arrange funds for supply of diesel and furnace oil on cash payment," Khatak said, adding that the decision was taken as receivables were rising with time: receivables against PSO stood at Rs 19 billion in end June 2010 and Rs 40 billion till now.
He said that Advisor to Prime Minister on Petroleum and Natural Resources Dr Asim Hussain was taking keen interest in resolving inter-circular debt. He said that ARL had made an adjustment with OGDC to lift fuel from those fields where situation was critical. He claimed that ARL was regularly paying taxes and PL to government. "As on April 25, ARL is to pay over Rs 40 billion against receivables of over Rs 40 billion," Khatak said.
ARL's receivables are as follows: from PSO Rs 36 billion, Pepco Rs 4 billion, Price Differential claims (PDCs) against government Rs 179 million. ARL is to pay Rs 27.9 billion to OGDC, Rs 978 million Government Holding Co, PPL Rs 2.1 billion SSGC Rs 10 million and discount on crude oil Rs 9.1 billion.
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