Finance Ministry has released Rs 9 billion to Pakistan State Oil (PSO) to clear the dues of oil refineries and mature Letter of Credits (L/Cs) for oil import, Business Recorder learnt on Thursday. Sources told Business Recorder that oil refineries and Oil Marketing Companies (OMCs) had raised the issue of circular debt in a recent meeting held at the Petroleum Ministry.

During the meeting, Finance Secretary had assured to resolve the issue of circular debt that was causing fuel supply problems for the oil refineries and OMCs. Oil industry had revealed during the meeting that circular debt problem might cause serious issues and interrupt fuel supply in the coming days if government did not arrange financing.

According to sources, PSO is to receive dues amounting Rs 33.605 billion from Wapda, Rs 26.7 billion Hubco, Rs 14.05 billion Kapco, Rs 1.82 billion PIA, Rs 513 million OGDC, Rs 1.53 billion Power Holding Co, Rs 1.382 billion audited price differential claims on HSD and Rs 2.09 billion price differential on imported PMG.

In return, PSO is to pay Rs 21.56 billion to PARCO, Rs 11.4 billion to PRL, Rs 8.9 billion NRL, Rs 13.5 billion to ARL and Rs 4.65 billion to Bosicor. PSO is bound to clear Rs 11.16 billion dues of KPC and Rs 9.3 billion on L/C payment up to February 8, 2010.

Copyright Business Recorder, 2010