Pakistan State Oil (PSO) refused to supply furnace oil to the power sector
MULTAN,Feb 18th:The cash strapped Pakistan State Oil (PSO) on Thursday refused to supply furnace oil to the power sector due to the non-payment of its dues of Rs 158 billion. PSO has decided to discontinue the fuel supply to power sector to avoid further defaults on part of the sector, sources said.
They said PSO took the decision after oil refineries threatened it with halting fuel supply, and the state-run oil marketing company is now in no position to continue supplies without receiving payment from the government. PSO earlier requested the Finance Ministry to direct Pakistan Electric Power Company (PEPCO) to remit payment from its monthly recovery to ease the company’s financial woes.
PSO sources said total receivables from the power sector had swelled to Rs 158 billion, with the major defaulting entities being WAPDA, HUBCO and KAPCO, which owed Rs 47.22 billion, Rs 73.29 billion and Rs 28.86 billion respectively. They said the amounts owed to refineries had also jumped to Rs 85 billion, while the payables to international oil suppliers had soared to Rs 43 billion.
PSO, which supplies 23,000 tonnes of fuel per day to the power sector, has not received any dues since the previous payment on January 7, 2011. PSO has been the primary fuel supplier to all major power sector companies of the country and has been instrumental in absorbing the impact of the current financial situation. It has received only Rs 38.74 billion against the released amount of Rs 45 billion, but despite the payment of Rs 38.74 billion from the government and PEPCO, the financial position of PSO is still critical.
Meanwhile, source in Lahore said PEPCO had failed to clear the dues of more than Rs 200 billion owed to various power generation companies and if situation continued, the country could face severe load shedding in the coming days. PEPCO owes has to pay Rs 52 billion to WAPDA for electricity produced from hydel generation until December 31, 2010.
The sources said the company officials were not paying in time to various power producers, despite knowing that it could cause massive load shedding if power produces stopped generation due to the non-payment. A PSO spokesman said PEPCO had not paid the company’s dues and the decision had been made to saev PSO from default.
HUBCO and KAPCO power units produce 1,200 megawatts each, thus the national grid could face a shortage of 2,400MW in the coming days. Presently, power generation hovers around 11,000MW and the shortfall is around 1,000MW. “If the shortfall rises to 3,400MW, then at least eight-hour load shedding would be undertaken across the country,” a senior official said, adding that it was high time PEPCO paid up.
PEPCO Energy and Management Conservation (EMC) Director Muhammad Khalid said KAPCO and HUBCO had sufficient stocks of oil and there was grim chance of load shedding.
They said PSO took the decision after oil refineries threatened it with halting fuel supply, and the state-run oil marketing company is now in no position to continue supplies without receiving payment from the government. PSO earlier requested the Finance Ministry to direct Pakistan Electric Power Company (PEPCO) to remit payment from its monthly recovery to ease the company’s financial woes.
PSO sources said total receivables from the power sector had swelled to Rs 158 billion, with the major defaulting entities being WAPDA, HUBCO and KAPCO, which owed Rs 47.22 billion, Rs 73.29 billion and Rs 28.86 billion respectively. They said the amounts owed to refineries had also jumped to Rs 85 billion, while the payables to international oil suppliers had soared to Rs 43 billion.
PSO, which supplies 23,000 tonnes of fuel per day to the power sector, has not received any dues since the previous payment on January 7, 2011. PSO has been the primary fuel supplier to all major power sector companies of the country and has been instrumental in absorbing the impact of the current financial situation. It has received only Rs 38.74 billion against the released amount of Rs 45 billion, but despite the payment of Rs 38.74 billion from the government and PEPCO, the financial position of PSO is still critical.
Meanwhile, source in Lahore said PEPCO had failed to clear the dues of more than Rs 200 billion owed to various power generation companies and if situation continued, the country could face severe load shedding in the coming days. PEPCO owes has to pay Rs 52 billion to WAPDA for electricity produced from hydel generation until December 31, 2010.
The sources said the company officials were not paying in time to various power producers, despite knowing that it could cause massive load shedding if power produces stopped generation due to the non-payment. A PSO spokesman said PEPCO had not paid the company’s dues and the decision had been made to saev PSO from default.
HUBCO and KAPCO power units produce 1,200 megawatts each, thus the national grid could face a shortage of 2,400MW in the coming days. Presently, power generation hovers around 11,000MW and the shortfall is around 1,000MW. “If the shortfall rises to 3,400MW, then at least eight-hour load shedding would be undertaken across the country,” a senior official said, adding that it was high time PEPCO paid up.
PEPCO Energy and Management Conservation (EMC) Director Muhammad Khalid said KAPCO and HUBCO had sufficient stocks of oil and there was grim chance of load shedding.
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