| GEO Business | | PSO says will cut fuel to WAPDA, IPPs on dues | Updated at: 0645 PST, Wednesday, July 28, 2010
 KARACHI: Pakistan State Oil (PSO) has threatened to stop supplying fuel to public and private power companies which fail to clear their dues by the end of the month, a company official said on Tuesday.
“PSO has sent ultimatums to Water and Power Development Authority, Hub Power Company and Kot Addu Power Company,” the official said requesting anonymity. “We are supplying 28,000 barrels of oil to these companies daily, but they have not paid a penny in July.”
WAPDA, HUBCO and KAPCO owe Rs.45 billion, Rs.55 billion and Rs.28billion to PSO respectively. Total receivables of the state-run fuel supplier now stand at Rs.139 billion.
When contacted, PSO spokesperson Mariam Shah said that the company can no longer borrow from banks to run daily operations as it has almost reached the limit of Rs.40 billion.
“The company already absorbed Rs.8.5 billion in interest cost by the end of May. Now we don’t have money to open L/Cs for the import of fuel oil.”
Analysts say that the cash-flow problems could limit the company’s ability to pay dividends. PSO did not pay any dividend while announcing its half-yearly and nine-month results during the fiscal year 2009-10, they said.
The company has been paying salaries on time but failed to give bonuses in the past one year. It has lost at least two of its senior officials to another oil marketing company.
Power generation companies delay payments to PSO on the plea that electricity distribution companies are not able to clear their dues on time. This vicious cycle of inter-corporate circular debt has held the entire energy supply line hostage for over two years, officials said. |  | | | |
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