Pakistan State Oil (PSO) has agreed to extend the encashment date of international fuel supplier M/s FAL Oil's performance bond for six months after the latter has expressed willingness to pay penalties on failure to meet contractual obligations that caused fuel shortage for power sector.
"The performance bond has been withheld by PSO for encashment which was to expire on March 31,2011 followed by the agreement to pay penalties by FAL Oil for not meeting the required supply of fuel during November - December 2010," spokesperson of PSO Mariam Shah said.FAL Oil delivered five cargoes in January that were scheduled to arrive in November-December 2010.
"The management committee of PSO has taken the decision based on the policies of the Company and evaluation parameters for non-performing suppliers keeping in view of national interest," she maintained. She further said that the loss figure on account of FAL Oil's failure to meet the required supply does not amount to US $30 million.
PSO has also rejected two cargoes of fuel oil with higher sulphur content during December 2010 after LSFO was tested from its lab in addition to Hydrocarbon Development Institute of Pakistan (HDIP) lab. After tests, LSFO was said to have higher sulphur content. In February 2010, PSO had also rejected FAL Oil ship carrying fuel oil cargo worth $30 million for the first time in the company' s history that such a decision was taken despite strong pressure from relevant quarters.