The News reported that in response to its demand for immediate release of at least PKR 50 billion, Pakistan State Oil has received PKR 5 billion from the Water and Power Development Authority.

The sources said that this is in addition to PKR 8.5 billion received earlier this month against a total fuel supply worth PKR 32 billion. PSO is in a very critical liquid position and have to defer cargoes if its receivables were not immediately paid.

Pakistan State Oil had already failed to meet its payment obligations to the local refineries. PSO supplies fuel worth PKR 32 billion a month to the power companies and the mounting accumulated receivables due to part payments was creating problems for the state oil company.

A spokesperson said that if the dues are not immediately cleared, PSO would have to defer cargoes that would result in supply to cut to the power sector. We do not intend to cut supply but this is what would happen if PSO does not get its dues. PSO provides product worth PKR 32 billion to the power sector every month and they pay around PKR 10 billion to PKR 12 billion.

It is not possible for PSO to finance future products if the same trend of payments stays because a lot has been accumulated. With the total receivables reaching an alarming figure of PKR 155 billion, the financial situation of Pakistan State Oil has become extremely precarious.

The huge outstanding is adversely affecting PSO’s liquidity and it may lead to inevitable breakdown in the supply chain, resulting in fuel shortages in the country. The power sector owes PSO an aggregate amount of approximately PKR 131 billion. Of these HUBCO owes Pakistan State Oil PKR 67 billion, whereas KAPCO and WAPDA owe PKR 35 billion and PKR 29 billion respectively.

(Sourced from www.thenews.com.pk)