ISLAMABAD - Pakistan State Oil Managing Director Amjad Parvez Janjua on Thursday said that due to non-payments from Ministry of Water and Power, the outstanding receivables of PSO have once again swelled to Rs202 billion and his company is unable to keep sufficient stock of furnace oil due to shortage of resources.
The PSO MD, while briefing Senate Standing Committee on Petroleum and Natural Resources, said that last year his company was paid Rs 99 billion when the government paid off Rs 342 billion to eliminate circular debt.
“We supply oil to ministry of water and power on the directions of government, whereas ministry does not pay us back for the oil they purchase and consume, and our outstanding dues keep on swelling,” he explained.
Janjua said that almost Rs100 billion was outstanding against MEPCO, while HUBCO has to pay 57 billion. He further stated that HUBCO is a private company but it sells electricity to MEPCO. He said Rs11billion was receivable from Pakistan International Airlines (PIA).
He said K-Electric (formerly KESC) has been paying most of its dues in cash, while it is also paying 20 per cent of its previous outstanding amount of 4.5 billion in monthly installments.
“It is not circular debt as the whole outstanding is parked at PSO and we have to wait for the payments while most of the times we don’t receive mark up,” he said.
He further said that mark-up was 12-14 per cent but the ministry of water and power does not pay it most of the times.
The committee members expressed their concerns over non-payments to PSO from ministry of Water and power and asked that why they charge huge monthly mark-up from consumers who fail to deposit bills within due date.
Janjua informed the committee that despite huge piling up receivables, his company earned a net profit of Rs21.2 billion with a tremendous growth of 31 per cent this year. He said, due to cash limitations, his company was unable to hold furnace oil stock for more than couple of days.
The members requested the chair to call Ministry of water and power officials so that their inputs could also be included. Janjua also briefed the members that due to flaws in legislation, the issue of crude oil shipment was not resolved despite the fact that ship remained in water for one month.
He said PNSC has filed a case against the PSO over the shipment of oil consignment, which failed to pass HDIP quality test and PSO has to pay Rs. 60 million in damages, if the case is decided against his company.