Pakistan State Oil Likely to Bankrupt in 7 Days
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According to The Nation, Ministry of Petroleum and Natural Resources, in a letter to recently elected Prime Minister Raja Pervaiz Ashraf, has immediately sought grant of Rs 1,200 Crore on daily basis to save cash-starved Pakistan State Oil (PSO) from bankruptcy, which is expected within a week if amount not provided.
In the letter it has been requested to the PM to grant Rs 5,000 Crore (Rs 500 billion) to the PSO on immediate basis. If this amount is not provided then the PSO will face bankruptcy within seven days because the circular debt of the PSO has crossed the alarming figure of Rs 500 billion. Put in other words, viewing present situation, Rs 1,200 Crore on daily basis is needed for PSO.
It was also learn that owing to the bankruptcy of the PSO, the supply of furnace oil to the power sector would witness a decrease by notable margin, which would also cause a decline in the power generation by 5,000MW.
Currently, PSO is supplying 28,000 tons on daily basis to the power sector. Besides, supply of petroleum oil and lubricants (POL) products in the country would also be disturbed horribly. Consequently, PSO would not purchase POL products from the international oil market.
It is worth mentioning here that financial matters leading to the bankruptcy of the PSO have now met with a worse situation owing to the disapproval of Law Ministry over floating the term finance certificates (TFCs) of Oil and Gas Development Company Limited (OGDCL).
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why this circular debt, the consumer pay on spot when they get petrol filled in their vehicle, isn’t it?
@Amir
We pay,they get that. But main issue that,PSO supply a large amount of fuel to power sector,but they didn’t get paid. We pay our electricity bills,and those bills amount get lost before reaching to PSO.
Zakir, actually main reason for circular debt is line losses, rather than that we pay and our money gets lost on the way. Some of us actually don’t pay against the electricity that is being used (called line losses), so are electricity producers unable to service their suppliers of fuel in fuel. PSO, being the largest OMC and suppliers of oil, is affected most.
welLcome to DEMOCRACY
One wonders where all the money is.
Circular debt has now become vicious cycle. It will cause serious problems in future. Wake up Government to real issues instead of power fight.
The watchdogs are on vacations…..or
visiting TV morning talk-shows……
Everything is nearing to it end in this country..
Nothing is right.
I wonder why aren’t they utilizing the Thar coal deposit for power generation ?
Oil is an expensive commodity.
Because my friend Thar coal deposits have been sold by the corrupt Govt to other countries.
Don’t know whether World will be finished in 2012, but if our DEMOCRATIC GOVT. will stay in POWER, surely PAKISTAN will be FINISHED.. ENJOY DEMOCRACY…
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