A cash-strapped Pakistan State Oil has paid over Rs 27 billion to international fuel suppliers including Kuwait Petroleum Company (KPC), while the Finance Ministry has released Rs 3.9 billion to the national fuel supplying company on Tuesday on account of liabilities against power sector, it is learnt.
According to sources privy to the financial matters of the state run fuel company, an amount of Rs 27 billion was due against the company before October 9, while the company had requested the government to provide Rs 17 billion to it on account of liabilities against power sector, but the government released only Rs 9 billion so far.
"We have requested the government for urgent release of Rs 17 billion as PSO had to pay this amount to KPC and other international fuel suppliers by October 9, 2012," they added. "The Finance Ministry released this amount following intense pressure from the Petroleum Ministry to PSO to enable it to continue supply of furnace oil to power sector uninterruptedly," sources maintained.
Sources said the Finance Ministry has released this amount to help reduce the growing financial burden on PSO in the wake of low recovery receivables from the power generation companies, which have been purchasing furnace oil to produce electricity. The PSO has also written a letter to the Petroleum Ministry voicing its fear about possible bankruptcy due to delayed payments by the power sector.
The letter also said that PSO had to pay Rs 112.78 billion to various local refineries, including Rs 85.56 billion to KPC. The total receivables and payables of PSO at present stand at Rs 270 billion, of which Rs 112.78 billion is payables and Rs 158.3 billion receivables.
Power sector is leading defaulter of PSO with over Rs 143 billion outstanding dues, the Hub Power Company Limited (Hubco) with Rs 62.44 billions followed by Water and Power Development Authority (Wapda) with Rs 60.9 billion, Kot Addu Power Company (Kapco) with Rs 7.58 billion, Karachi Electric Supply Company (KESC) Rs 11.34 billion and Independent Power Plants (IPPs) Rs 1.15 billion outstanding dues. The company has to receive Rs 1.099 billion from Pakistan Railways (PR), Rs 1.98 billion from Pakistan International Airlines (PIA), Rs 365 million National Logistic Cell (NLC) and Rs 432 million from Oil and Gas Development Company (OGDCL).
According to official data, the oil giant's total payables to local refineries and international fuel suppliers stand at Rs 112.78 billion of which Rs 27.2 billion to local refineries and Rs 85.56 KPC along with other international fuel suppliers' companies.
The company is to receive Rs 1.62 billion on account of audited price differential claim of High Speed Diesel (HSD), Rs 3.407 billion on account of price differential on Low Sulphur Fuel Oil & High Sulphur Fuel Oil (LSFO/HSFO), Rs 1.36 billion on account of price differential on imported PMG and Rs 3.909 billion price differential under GLMP and Rs 844 million on account of financial charges on PIA.
The petroleum ministry had offered to supply 32,000 tons furnace oil to power sector on June 23, 2012 when Prime Minister Raja Pervez Ashraf chaired his first meeting as premier on energy crisis. However, the offer was later reduced to 28,000 tons daily. The country was facing up to 12-16 hours loadshedding, while some remote areas had to face up to 18 hours power outages. The situation has significantly improved over a period of time. "The main issue is with the recovery of electricity bills and due to various reasons the electricity distribution companies are facing problems, disconnecting the connections of defaulters," the official said. "Strong handed steps are needed to speed up the recovery drive or the government should take responsibility of the growing circular debt."