PSO warns of fuel supply cut if PIA fails to pay Rs1.50bn

• PSO supported PIA despite being in financial trouble: sources.
• PIA fails to make complete payment of Rs3,916m in Nov. 
• FBR also orders to unfreeze PIA airline’s accounts.

KARACHI: Pakistan State Oil (PSO) has sought Rs1.50 billion from Pakistan International Airlines (PIA) by Friday for the fuel purchased from it, warning of a supply cut if payment is not made, The News reported. 

A day earlier, the Federal Board of Revenue (FBR) directed the authorities concerned to freeze the flag carrier to recover an outstanding tax amount of Rs2.76 billion and later withdrew the orders. 

“FBR has ordered the unfreezing of the airline’s accounts across the country,” said a PIA spokesperson in an announcement, adding that the national carrier and FBR’s Large Tax Unit were in constant contact to resolve the issue. 

As PIA received some respite from FBR, the sword is hanging over the fuel supply to PIA after PSO demanded the payment of Rs1.50 billion from the national airline by Friday.

Sources said that PSO supported PIA despite being in financial trouble recently when PSO extended additional credit to the airline twice. However, PIA is violating its commitment and in this situation, PSO would be left with no option but to curtail the supply to the airline. 

Though the payment plan furnished by PIA on October 27, 2023, for the month of November 2023 did not cover the clearance of outstanding against current supplies, which had accumulated to Rs2,166 million till October 31, 2023, still, PSO continued supplies, sources said. 

As per the payment plan, an amount of Rs5,022 million was to be paid from November 1 to 27, 2023, whereas PIA paid Rs3,916 million, a shortfall of Rs1,106 million. PSO asked PIA to disburse Rs1,500 million by Friday for uninterrupted jet fuel supply, sources said.