PSO receivables swell to Rs 161.8 billion

The cash-strapped Pakistan State Oil (PSO) receivables on Saturday swelled to Rs 161.8 billion, which the company termed a default-like situation. "If we do not receive at least Rs 30 billion by Monday (tomorrow), we will definitely be at default position as we have awarded a tender of one million tons oil for supply of fuel planned for March and April," a PSO official said, adding that the tender was awarded after assurance of Rs 30 billion receipt.
The tender was awarded for 14 cargoes of 65,000 tons of high-sulphur fuel oil and another six cargoes of 60,000 tons of low-sulphur fuel oil (LSFO). PSO has also awarded a tender for three jet fuel cargoes of 16,500 tons, for March-April delivery. Despite commitments, the government has not released funds to PSO on account of supply of fuel to Independent Power Plants (IPPs), leaving the state-run oil giant in deep financial crises. The official said the company''s receivables have reached all time high level of Rs 161.8 billion, mainly due to non-payment of dues by power sector.
Managing Director Irfan Qureshi contacted the Secretary Finance to appraise him about critical situation. According to the Secretary Finance, the Prime Minister had signed the summary for release of Rs 30 billion and the file has been sent to Secretary Water and Power for processing, the official added. The outstanding balance was Rs 150 billion during the first week of current month and increased sharply as none of PSO''s major client paid money, the official added.
On February 17, PSO suspended supply of furnace oil to power entities, including Wapda, Hubco, OGDC, PIA, KESC and Kapco have yet to pay Rs 150 billion to the PSO for purchase of furnace oil. Oil refineries have also reduced the credit supply to PSO by 58 percent due to non-payment. A year ago in December 2009, PSO''s refinery receipts stood at 173,000 tons that were dropped to only 73,100 tons at present.
As on February 26, 2011, PSO receivables against different clients stand at; Wapda Rs 49.4 billion, Hubco Rs 69.6 billion, Kapco Rs 28.5 billion, PIA Rs 1.2 billion, OGDC Rs 303 million, KESC Rs 1.6 billion, financial charges from PIA Rs 960 million, price differential claims (PDC) on High Speed Diesel (HSD) Rs 1.09 billion and power differential claims (PDC) on imported PMG Rs 4.6 billion. PSO''s payables stand at Rs 126 billion to local as well as international fuel suppliers as follows: Parco Rs 31.5 billion, PRL Rs 11.5 billion, NRL Rs 33 billion, ARL Rs 32.06 billion and Bosicor Rs 4.6 billion. PSO will have to pay Rs 36 billion to KPC for upcoming import tender.