ISLAMABAD, Aug 4: After intense pressure from the petroleum ministry the government released Rs1 billion on Saturday to the state-owned PSO to continue supply of furnace oil to the power sector.
Sources said the finance ministry has released this amount to help reduce the growing financial burden on the Pakistan State Oil (PSO) in wake of low recovery receivables from the power generation companies who have been purchasing furnace oil to produce electricity.
Due to low recovery, PSO has also reduced the supply of furnace oil from an agreed 28,000 tons to an average of 23,000 tons.
PSO also wrote a letter to the petroleum ministry voicing its fear about possible bankruptcy due to delayed payments by the power sector.
PSO’s receivables from the power sector have surged to Rs233.06 billion, which includes Rs62.01 billion from Wapda’s generation plants, Rs110.54 billion from Hubco, Rs36.66 billion from Kapco, Rs12.15 billion from Kesc, Rs7.80 billion from the IPPs and Rs3.90 billion as price differential from the National Transmission and Dispatch Centre.
The letter also said that PSO has to pay Rs171.59 billion to various refineries, including Rs84.87 billion to Kuwait Petroleum.
The petroleum ministry had offered to supply 32,000 tons furnace oil to the power sector on June 23, 2012 when Prime Minister Raja Pervez Ashraf chaired his first meeting as premier on the energy crises. However, the offer was later reduced to 28,000 tons daily.
The country was facing up to 12-16 hours load-shedding, while some remote areas face power outages of up to 18 hours but the situation has significantly improved over a period of time.
Currently, the electricity shortfall has declined to around 3,000 megawatts, as generation has been enhanced to around 14,400 MW.
“Due to rains the demand has also dropped to around 17,000 MW but generation has also increased significantly,” said an official of the ministry of water and power.
“The Muzaffarghar plant producing 870 MW has been brought online along with two other units generating a 350 MW each.”
The official said that around 325 MW would be available in the national grid by early next week when Chashma–II would be back online.
However, regarding non- payments to the PSO, he official said that it was a matter which required political will.
“The main issue is with the recovery of electricity bills and due to various reasons the electricity distribution companies are facing problems disconnecting the connections of defaulters,” the official said.
“Strong handed steps are needed to beef-up the recovery drive or the government should take responsibility of the growing circular debt.”