PSO, sources said, has claimed that it has supplied fuel oil to the power sector of the value of around Rs 58.5 billion from May-July 2018, in line with the directives of MoE (Power Division). However, despite assurances, PSO did not receive corresponding payments for the supplies made and was allocated only Rs 17.8 billion from the regular Pakistan Electric Power Company (PEPCO) allocations during this time, resulting in around Rs 40.6 billion deficit, adding up to PSO ''s already burgeoning debt against power sector customers.
Additionally, PSO has Rs 14.7 billion overdue against LNG supplies to SNGPL as of August 13, 2018, adding up to around Rs 55 billion total against the power sector/SNGPL.
"We have already utilized Foreign Exchange (FE-25) loans and local borrowing lines of Rs 79 billion ($ 635 million) and Rs 47 billion, respectively. Our remaining borrowing lines will be fully utilized by the end of August 2008," the sources continued. PSO maintains that as communicated earlier through a letter of August 1, 2018, it is in serious financial crunch due to continuous non-payment by Hub Power Company (Hubco), Kot Addu Power Company (Kapco) and Generation Companies (GENCO ) and non-payments to PSO will result in international default and disruption of whole supply chain of petroleum products in the country.
"As agreed on June 26th meeting and further endorsed in the meeting of July 19th, PSO has not imported any furnace oil cargoes as it was required to be given a firm demand by MoE (Power Division) for any fuel oil requirement of power sector from July onwards, which is still awaited," the sources quoted PSO as saying in a letter to Director General (Oil) and a copy of which has been sent to Power Division.
According PSO''s General Manager (Finance) if Power Division pays at least Rs 65 billion immediately (Rs 55 billion against above deficit and Rs 10 billion as working capital requirement) to release its choked credit lines, supplies can be arranged from import tenders, which would require around 60 days in line with the import cycle. Without getting the payment and firm demand, it''s not possible to arrange further supplies to the credit customers.
Last week, Power Division testified before a Special Committee that power sector''s consolidated payables reached Rs 1.148 trillion of which Rs 582.86 billion loans are parked in the books of Power Holding (Private) Limited (PHPL) whereas Rs 566 billion is in circular debt. The mark-up on loans obtained from consortia of banks and parked in the books of PHPL is being collected from consumers through surcharge at a rate of Rs 0.43 per unit. PHPL has paid Rs 32 billion interest on these loans so far whereas Rs 153 billion mark-up is still pending.