ISLAMABAD-Pakistan State Oil has alleged that K-Electric has placed the order for furnace oil supply for 2020 after the delay of nine months, whereas, the estimate of required fuel for next year is still awaited.

As per fuel supply agreement (FSA), K-Electric (KE) has to provide PSO at least 02 months prior to the beginning of each year a monthly estimate of the anticipated requirement of furnace oil (F0), said a spokesman of the PSO here.

This is just an estimate and not a firm demand. This estimate, which was to be provided in April 2019, was provided in Jan 2020 whereas, the same is still awaited for this year, the spokesman claimed.

As per FSA, firm demand has to be placed 30 days prior to the commencement of every month, which was not followed for June and the demand for June was confirmed for 120,000 metric tons (MT) on May 15, 2020 after continuous follow up by PS0.

KE’s upliftment against their projected demand has remained very erratic during six months of November 2019 to April 2020 resulting in upliftment of only 130,240 MTs vs demand of 287.000 MTs. This unreliability on the part of KE is causing a great deal of uncertainty in the fuel supply chain.

Upon receipt of firm demand on May 15th PSO immediately informed Ministry of Energy (MoE) for KE‘s June demand for 120000 MTs. Despite lower refinery allocations and ban on imports of furnace oil, PSO managed to supply around 75,500 MTs during June, while the balance demand was catered through additional gas allocation by MOE equivalent to 50000 MTs of furnace oil.

PSO has supplied 40200 MTs till date to KE & its IPPs in July. Furthermore, as per the MoE’s direction additional RLNG supplies to KE are continuing at around 90 mmcfd, which translates to around 2300 MTs per day at F0 equivalent volume.

The Ministry of Energy recently granted permission for imports, and PSO immediately floated a tender for furnace oil and two cargoes of the product are expected to be delivered by the middle of July.

It is worth to mention here that the K-Electric CEO, Moonis Alvi had several times held the federal government responsible for the prolonged power outages in Karachi and said that the company’s plants ran out of oil due to which it had to resort to loadshedding.