Lahore, 22 September (Argus) — Cash-strapped state-owned marketer Pakistan State Oil (PSO) has resumed fuel supplies to domestic utilities Hub Power and Kot Addu Power after being paid 12bn rupees ($140mn) by the federal government.
“After threatening to stop supplies of fuel to Hubco and Kapco, PSO in fact did stop supplies on 18 September for 12-14 hours. However, supplies were resumed on 19 September,” said Karachi-based energy analyst at KASB Securities Fawad Khan.
PSO supplies nearly 150,000 b/d of fuel oil to different power generation companies across Pakistan. It supplies 35,000 b/d to Hubco and 23,000 b/d to Kapco.
“PSO is by no means out of woods,” said PSO spokeswoman Mariam Shah. “It has to order oil imports for October and November, and it will only be possible if the government and other private entities share their payments schedule with the company so it can plan imports for smooth supplies.”
Hubco owes Rs63bn and Kapco Rs31bn to PSO, while state-owned utility Wapda has outstanding payments of Rs47bn ($553mn). PSO itself owes more than $1bn to Pakistani refineries and Kuwait's state-owned oil firm KPC for supply for petroleum products.
“The power sector owes PSO Rs149bn and payment of Rs12bn and promises of Rs27bn hardly merits restoration of oil supplies, Shah said. “It was done only to let the power sector run smoothly because the stoppage could have hurt the country badly.”
Gasoline shortages in central and southern Punjab province will improve, PSO said, with the return of the flood-hit 100,000 b/d Pak Arab Refinery in Punjab province that supplies the marketer with about 15,000 b/d.
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