KARACHI: Pakistan State Oil (PSO) management, in a written letter, has asked the Ministry of Petroleum and Natural Resources, to get release Rs198 billions outstanding dues from power generating companies, otherwise the company will halt business with these companies.
The PSO said that in view of these receivables which stood at Rs198 billion, the company had borne penalties of approximately Rs250 million for delay in payments to banks from October to December 2014.
It also paid $1.8 million in demurrages from July to November last year and settled damages claims of about $6.4 million of the suppliers because of delay in offloading cargo from vessels and in opening letters of credit (LCs).
In this situation, PSO was unable to open new LCs as the company’s credit limits had already been exhausted and LC lines of Rs110 billon were blocked. “We are left with no choice but to freeze business ties with the power sector once current supplies are exhausted.” “Once the promised Rs10 billion is released, we would be able to import relevant cargoes,” the company said, adding considering the quantity currently available and the 20-day time required to bring further cargoes, Kot Addu Power Company (Kapco) would likely face a halt to oil supplies.
In response to the request for increasing oil supply from 1,500 tons to 4,500 tons per day, PSO suggested that if it was agreed the number of days covered would come down from 37 to 13. Similarly, with the acceptance of the request for increase in supplies to Hub Power Company (Hubco) from 5,000 to 7,000 tons per day, the number of days covered would fall from 18 to 12. However, Hubco uses special-grade furnace oil and a vessel carrying the imported cargo is waiting for berth.
