PSO receivables, payables touch Rs 317 billion mark

Pakistan State Oil''s (PSO) total receivables and payables have touched Rs 317 billion mark, of which Rs 174.7 billion are receivables and Rs 143.29 billion payables.
According to official data available with Business Recorder, the PSO receivables include Rs 36.058 billion from Water and Power Development Authority (Wapda), Rs 74.47 billion from the Hub Power Company (Hubco), Rs 39.3 billion from Kot Addu Power Company (Kapco), Rs 2.8 billion from Pakistan International Airline (PIA), Rs 296 million from Oil and Gas Development Company (OGDC), Rs 5 billion from Karachi Electric Supply Company (KESC) and Rs 1.1 billion from Pakistan Railways.
Out of Rs 174.7 billion, Rs 138 billion are overdue. The national fuel supply company is to receive Rs 1.4 billion on account of audited price differential claim of high speed diesel (HSD), Rs 3.4 billion on account of price differential on low sulphur fuel oil and high sulphur fuel oil (LSFO/HSFO), Rs 1.36 billion on account of price differential on imported PMG and Rs 8.6 billion price differential under GLMP.
The power sector is the leading defaulter of the PSO which owes an aggregate amount of approximately Rs 154.8 billion. The data shows that within a week PSO''s outstanding dues against power sector have increased by Rs 17.8 billion.
PSO''s total payables to local refineries increased to Rs 72.27 billion on November 19, of which Rs 33.5 billion are owed to Pak-Arab Refinery (Parco), Rs 9.8 billion to Pakistan Refinery (PRL), Rs 9.17 billion to National Refinery (NRL), Rs 16.8 billion to Attock Oil Refinery (ARL), Rs 2.34 billion to Bosicor, and Rs 682 millions to others. If L/C payment of Rs 71.015 billion is included, total liabilities of the company are in excess of Rs 143 billion. The national energy company is supplying an average of Rs 32 billion worth of fuel to the power sector on monthly basis. The power sector continuously defaults on its payment obligations to PSO.
The continuous non-payment by power sector has made PSO severely cash-strapped. As a result, the company has defaulted on local refineries payments this month which has adversely affected local production. Furthermore, the company is constantly struggling to meet its international payment obligations, as any default on the part of PSO to its international suppliers would disrupt supplies with their resumption expected to take months.
The Committee was shocked to learn the power company was not able to collect Rs 150 billion from the private sector and more importantly that the people managing the affairs of the company were clueless to tackle the problem.
On the other hand, Sui-Southern Gas Company''s (SSGC) outstanding dues against Karachi Electric Supply Company (KESC) have ballooned to Rs 32 billion. KESC has not made any payment to SSGC since August 2011. This alarming situation is forcing SSGC to substantially curtail gas supplies to KESC.
SSGC is supplying gas to KESC without any Gas Sale Agreement (GSA) and due to political pressure the company in not in a position to suspend gas supplies to KESC. It must be mentioned here that SSGC purchases gas from local and foreign exploration and production companies. These purchases are governed through Gas Sale and Purchase Agreements (GSPAs). KESC''s failure to settle its dues with SSGC has put the latter in severe liquidity crisis. On the other hand, SSGC is making efforts to negotiate and finalise GSA with KESC, but in vain, primarily due to KESC''s inflexibility. KESC is also unwilling to provide SSGC with bank guarantee, also referred to as Gas Security Deposit that would have provided security to SSGC in case of default.