Islamabad, Feb 12: Pakistan’s largest state-owned oil company, PSO, has asked the Ministry of Petroleum to ensure settlement of Rs197 Billion circular debt payments to avoid financial default and to continue the supply and procurement of petroleum products by the company.
A letter addressed to Ministry of Energy Petroleum Division (MoEPD) on February 10, reminded the ministry about the previous letter dated 3rd December, 2020, mentioning receivables of PSO against circular debt from power sector.
GENCO-1. GENCO-III, CPPA, HUBCO and KAPCO, owe a sum of Rs197 billion to PSO.
The outstanding amounts against HUBCO and KAPCO as of Oct 31, 2020 amounted to Rs53 Billion and Rs12 billion respectively.
A letter sent to Chief Executive of GENCO-III today also mentioned the details of financial breakdown of outstanding amount of Rs131 billion and regretted that no major payment had been remitted to clear the principal overdue amount of Rs69.3 billion and Late Payment Interest (LPI) of Rs62.4 billion.
“The unnecessary delays and insufficient payment against outstanding receivables is further aggravating our precarious financial position as a result of liquidity issues. In view of PSO’s current financial constraints which is attributable to huge outstanding receivables of Rs131.7 billion from GENCO-III, you are therefore urged to take up with the concerned authorities for early release of funds,” PSO said in the letter.
A PSO letter sent to HUBCO said HUBCO had been in default of making payments to PSO against credit supplies since May 2018.
“We regret to note that till date no major recovery has been remitted to clear the principal overdue amount if Rs23.33 billion and LPI of Rs29.67 billion,” PSO said.
A letter addressed to KAPCO said the total accumulated LPI charges amounting to Rs12.2 Billion were outstanding against KAPCO since 2009 and sought early payments to avoid further inflation of LPI charges.