ISLAMABAD: Pakistan State Oil (PSO) has slashed petrol imports by half and skipped overseas purchases of fuel oil this month, a spokesman said on Friday, worsening power cuts and leading to petrol shortages around the country.
PSO imports between 85 and 90 percent of the country's fuel oil and petrol, but it has been forced to cut purchases because it has not been paid by its customers.
The nuclear-armed South Asian nation of 180 million is already struggling with power blackouts. The shortage of fuel oil - used for generating electricity - and petrol is likely to increase anger over the chronically mismanaged power sector.
The government subsidises electricity, but rarely pays the subsidies to power companies on time. They, in turn, cannot pay for their fuel imports, leading to a buildup of unpaid bills referred to as "circular debt".
The International Monetary Fund estimates the problem knocks two percentage points off Pakistan's GDP growth per year.
PSO is currently owed $1.75 billion by the power sector, said the spokesman, and another $250 million by other customers.
PSO usually imports 200,000 metric tonnes of petrol per month, the spokesman said. This was reduced by half for the month of January, he said.
The importer also usually brings in around 260,000 tonnes of fuel oil per month, but only 65,000 tonnes were imported in December and none in January, he added.
About a third of Pakistan's electricity is powered by fuel oil.
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