RECORDER REPORT
ISLAMABAD: The receivables of the state-run Pakistan State Oil (PSO) reached Rs317 billion by December 1, 2017.
The total receivables from power sector accumulated to Rs196.5 billion including Rs64.40 billion generated after the inception of seven-day credit arrangements. The PSO is also continuously meeting PIA’s demand of jet fuel. However, PIA is not making payments to PSO to settle outstanding dues, and as a result the principle amount has swelled to Rs13.8 billion by the end of November 2017. Besides, an amount of Rs13.4 billion was also on receivable head from the SNGPL on account of the LNG supplies.
The power sector remained a major defaulter and multibillion rupees had been stuck in this sector following ban of use of furnace oil. The PSO has been major supplier of furnace oil to the power sector. The Petroleum Division had sought intervention of Cabinet Committee on Energy in its recently held meeting to clear bills of the PSO to avoid disruption in oil and gas supply chain.
The PSO had been supplying furnace oil to feed power plants but the government abandoned use of this fuel in power plants and the PSO is now facing liquidity crunch following refusal of power sector to clear multibillion rupees dues. The Petroleum Division had approached Cabinet Committee on Energy, saying that receivables against power sector have adversely affected the financial position of state-run fuel supplier and any further delay in payment could result in default of oil and gas sector leading to disruption of the entire supply chain.
The sources said that the Ministry of Energy (Petroleum Division) has asked Finance Division for immediate release of Rs35 billion to bail out cash-starved PSO.
The issue of overdue payments from power sector surfaced in the past and the then secretaries of petroleum and water and power had agreed on February 7, 2015 that all further supplies made by the PSO would be settled under seven days credit arrangement. At that time, the total receivables from power sector were Rs131 billion excluding late payment surcharge of Rs50 billion.
