PSO decides not to cut fuel supply to PIA: payment on daily basis assured

Pakistan State Oil (PSO) has decided not to cut fuel supply to Pakistan International Airlines (PIA) by 50 percent after the latter committed to provide cash on daily basis to the former on account of fuel supply, Business Recorder has learnt. "As an immediate measure, PIA will disburse payment on daily basis so that the outstanding amount do not exceed," PIA officials agreed in a meeting held here on Tuesday.
PSO supplies 0.7 to 0.8 million liters fuel worth Rs 50 million on daily basis to PIA. As on February 8, 2011, PSO's total outstanding against PIA was Rs 1.09 billion. In addition, financial charges against PIA amount to Rs 1.09 billion. During the meeting, PIA agreed to pay Rs 100 million to PSO and also committed to pay cash onwards from account of fuel supply. "That is why PSO will not cut fuel supplies to PIA," sources maintained.
PIA also agreed to release cheque of Rs 100 million today, which will be credited out of total outstanding amount of Rs 952.1 million. PIA will submit a detailed payment plan within eight to 10 days for balance outstanding amount of Rs 852.1 million.
In a letter sent to PIA on February 7, 2011, PSO authorities said "it may be noted that out of cheques amounting to Rs 333 million you have given clearance today to deposit cheques of Rs 48 million only that would be credited to PSO account on 08-02-11". PSO authorities maintained that cheques worth Rs 285 million were in possession awaiting approval from PIA to deposit the same.
"Moreover, you are requested to provide additional cheques amounting to Rs 622.7 million to clear the outstanding balance by tomorrow ie Tuesday February 08, 2011 positively," PSO letter added. "We regret to inform you that you have once again failed to honour your commitment made vide letter No MFC/PSO/2011 dated 03.02.11 wherein you confirmed that a substantial amount will be disbursed to PSO on 04.02.11, but, only Rs 98 million were cleared out of the outstanding amount of Rs 951 million," PSO authorities said, adding that this is not new as PIAC on past 45 occasions committed to clear the outstanding amount and after fuel restrictions were deferred by PSO, PIA backed out from its commitment. The outstanding amount has now reached to almost an unbearable level which would certainly affect smooth flow of supplies to PIA.
"If total outstanding amount of Rs 907.7 million is not cleared by closing hours ie 05:00 pm on Tuesday (February 8, 2011) then fuel restrictions to the extent of 50 percent effective 0001hours Wednesday February 9, 2011 will be applied at all PSO stations," PSO letter concluded.