The News reported that Ministry of Petroleum has ringed alarm bells with the Ministries of Finance and Water and Power to arrange payment of Pakistan State Oil’s receivables as a default hovers over the state run oil marketing company.
A source in the ministry said that the situation is quite critical and PSO may face default if the first tranche is not released by September 16th 2011 to make the letter of credit payments.
Following receipt of an SOS from PSO, additional secretary petroleum wrote a letter to the Ministry of Finance and Ministry of Water and Power to inform them that the situation was slipping out of hands. PSO has been continuously apprising the authorities of financial crisis owing to persisting defaults in payments by power sector companies.
The company’s receivables from the power sector and the government on account of various price differential claims have reached PKR 145 billion which would ultimately lead to a default on its international LC commitments. The company has requested immediate release of at least Rs50 billion to enable the company to ensure continuity of petroleum products supply across the country.
Sources said that if funds were not released, PSO would be defaulting on its LCs due next week leading to disruption in supplies.
Experts said that PSO’s default meant default on the part of the country which would cause the entire energy chain to collapse. If the company defaults at the international level, oil supply will not be resumed for six months.
PSO has payment obligations to the tune of PKR 53 billion for the month of September including LCs of PKR 26 billion for September 10th to 16th 2011 PKR 15.6 billion for September 17th to 23rd 2011 and PKR 11.4 billion for September 24th to 30th 2011. The current liabilities stand at PKR 156.605 billion while the company’s receivables are at PKR 150.133 billion.
PSO has to make a total LC payment of PKR 90.554 billion to Kuwait Petroleum Corporation and other suppliers this month. The company’s payment obligations towards local refineries stand at PKR 66.051 billion including PKR 57.945 billion which has already become overdue.
PSO has to pay PKR 28.611 billion to Pak Arab Refinery, PKR 8.203 billion to Pakistan Refinery, PKR 9.54 billion to National Refinery, PKR 15.072 billion to Attock Refinery, PKR 4.209 billion to Bosicor and PKR 416 million to others.
PSO’s major receivables include PKR 30.717 billion from WAPDA, PKR 62.851 billion from Hub Power Company, PKR 32.410 billion from Kot Addu Power Company, PKR 1.718 billion from Pakistan International Airlines, PKR 7.557 billion from Karachi Electric Supply Company and PKR 1.06 billion from Pakistan Railways. PSO has to receive PKR 1.382 billion against audited price differential claims for high speed diesel, PKR 3.407 billion for fuel oil, PKR 1.358 billion for motor gasoline and PKR 6.294 billion under other heads.
(Sourced from www.thenews.com.pk)
