Pak-Arab Refinery Company (Parco), a joint venture between Pakistan and Abu Dhabi with 60% and 40% stakes respectively, warns Pakistan State Oil to stop its fuel supply unless it starts making payments in advance.
PARCO, which now doubts PSO whether it could honor its words and reduce oil supply to put pressure. But this is nothing new for PSO. It would be interesting to note that PSO was also sued by ICC Chemical in US courts, alleging that PSO has caused losses to it by breaching a contract for import of base oil.
According to a local newspaper, the management at PSO discussed a new mechanism in one of its recent meeting which will ensure cash payment for fuel supply means that PSO will have to make advance payments to get oil deliveries.
But part of this problems seems to be coming from Govt which, for first time in history of Pakistan default on its sovereign debt, is holding Rs 202 Billion of PSO.
According to EconomyAge’s sources in the Petroleum Ministry, the state-owned oil giant is supplying fuel worth over Rs 32 billion monthly to the power sector, while the sector is paying back only around Rs 15-16 billion per month due to which PSO’s outstanding are continually increasing.
PSO recently requested the government to provide Rs 50 Billion so it could pay international fuel suppliers.
PSO has to receive Rs 344 Crore from Pakistan International Airline (PIA), Rs 28 Crore from Oil and Gas Development Company Limited (OGDCL), Rs 700 Crore from Karachi Electric Supply Company (KESC), Rs 50 Crore from National Logistic Cell (NLC) and Rs 133 Crore from Pakistan Railways.
And at present PSO has to payback Rs 2,665 Crore to Pak Arab Refinery Limited (PARCO), Rs 1,445 Crore to Pakistan Refinery Limited (PRL), Rs 936 Crore to National Refinery Limited (NRL), Rs 2,811 Crore to Attock Refinery, Rs 260 Crore to Bosicor and Rs 115 Crore to others.
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