The government has asked Pakistan State Oil (PSO) to enhance furnace oil supply from 16,000 tons per day to 20,000 tons per day to deal with the intensifying power crisis, it is learnt.
Sources privy to the developments while referring to the decisions taken at a high-level meeting held here Tuesday at the Ministry of Petroleum and Natural Resources, chaired by the Petroleum Minister Sohail Wajahat Siddiqui, told Business Recorder that the PSO management has made it clear to the government that additional fuel supply is only possible if the government extends funds in advance or issues a letter of comfort to PSO.
"We have asked the government for a letter of comfort from the Ministry of Finance as well as sovereign guarantee from the government to arrange future furnace oil purchase. PSO is on the verge of international default if the government does not release our outstanding dues against power sector as PSO is supplying fuel to power houses on the guarantee of the government, while Wapda and other concerned departments have failed to recover electricity bills from defaulters," sources added. The meeting was also attended by Abid Saeed, Secretary Petroleum, Naeem Yahya Mir Managing Director (MD) PSO, Arif Hamid MD Sui-Northern Gas Pipelines Limited (SNGPL), Zuhair Siddiqui MD Sui-Southern Gas Company Limited (SSGC), Dr Shahab Alam, Director General (DG) Gas, Dr Azam Khan DG Oil as well as other relevant officials.
"We have informed the government that even if it extends finances to PSO for the enhancement of fuel supply it will not be possible before May. An increase of 4,000 tons in fuel supply to power sector for a month means the country will spend an additional Rs 10.2 billion on procuring 120,000 tons of furnace oil. PSO is currently supplying 16,000 tons of furnace oil daily to power sector worth Rs 1.36 billion.
At present total receivables of PSO from power and other sectors stand at Rs 144.54 billion of which Rs 48.79 billion is due from Wapda, Rs 55.64 billion from the Hub Power Company (Hubco), Rs 12.3 billion from Kot Addu Power Company (Kapco), Rs 1.7 billion from Pakistan International Airlines (PIA), Rs 369 million from Oil and Gas Development Company Limited (OGDCL), Rs 12.7 billion from Karachi Electric Supply Company (KESC), Rs 310 million from National Logistic Cell (NLC), Rs 1.5 billion from Independent Power Plants (IPPs) and Rs 1.32 billion from Pakistan Railways.
The company is to receive Rs 1.52 billion on account of audited price differential claim of High Speed Diesel (HSD), Rs 3.4 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 3.91 billion price differential under GLMP.
PSO total payables to local refineries stand at Rs 32.25 billion - Rs 19.4 billion to Pak-Arab Refinery Limited (Parco), Rs 1.52 billion to Pakistan Refinery Limited (PRL), Rs 7.32 billion to Attock Oil Refinery Limited (ARL), Rs 2.26 billion to Bosicor and Rs 1.75 billion to others. PSO has to clear Rs 66.23 billion dues of Kuwait Petroleum Company Limited (KPC) on account of letter of credit.