Increasing Receivables will lead to fuel shortage: PSO warns

Increasing Receivables will lead to fuel shortage: PSO warns 

The Pakistan State Oil (PSO) has informed that the amount of receivables have reached to Rs179 billion, which is due to the non-payment of the power sector and specifically PIA.

The increasing amount of receivables will ultimately affect the supply chain, which will lead to the fuel shortage in the country.

PSO indicated that if these payments are not made on urgent basis by the power sector and the national flag carrier, then the future import of fuel cargoes will suffer.

Furthermore, PSO’s spokesperson told that despite of the due payments from these sectors, PSO is trying best to continue the supply chain. He added that PSO has not halted its fuel supply of Rs32 billion to the power sector of Pakistan
but Wapda, Kapco and Hubco kept on doing default in making payments, continuously.

From the past six months, an average shortfall of Rs10 billion is recorded from the power sector whereas only Rs5.2 billion were disbursed to PSO in November.

Pointing towards the national flag carrier, he said that PIA is constantly violating its agreement with PSO regarding the regular payments. Instead PSO has kept on supplying fuel to PIA in national interest and has supported PIA
in every possible way.

PIA promised PSO that the outstanding payment of amount 1 billion will be made to PSO in October. But PIA not only violated its promise in-fact these days they have stopped making daily payments of fuel as well.

The PIA official said, "The situation has now reached a critical level as the continuous non-payment by these entities has left PSO cash-strapped and unable to meet its payment obligations to both local and international suppliers."

He also added that proper measures should be taken immediately otherwise this will lead to fuel crisis in the country.

The oil production in Pakistan is already in doldrums and if the imports are reduced, it will increase load-shedding, fuel shortages and disruption in flights. Therefore, these payments should be made to PSO immediately otherwise
this will result in discontinuation of fuel supply.

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Posted by Mursil Mehmood Butt on Nov 26 2011. Filed under Business. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry