ISLAMABAD - The management of Pakistan State Oil (PSO) has extended the encashment date of M/S FAL Oils performance bond worth of millions, which reportedly remained failed to sell cargoes of fuel oil to the company. Reliable sources informed that the management of Pakistan State Oil (PSO) agreed to extend the encashment date of M/S FAL Oils performance bond worth in millions following negotiations with the latter whereby FAL Oil has agreed to compensate the national company against losses incurred due to failure of FAL Oil to meet its contractual obligations. The management committee of PSO has taken the decision based on the policies of the Company and evaluation parameters for non-performing suppliers keeping national and company interest as a priority, sources added. The performance bond has been withheld by PSO for encashment, which expired on March 31, 2011 followed by the agreement to pay penalties by FAL Oil for not meeting the required supply of cargoes of fuel during the months of November - December 2010, sources said. When contacted PSO, gave this statement, we have followed the process and as per supply agreement penalties worth $3.6 million to be deposited by 26th (April) and in the second phase late surcharge penalties worth $4 million. We had threatened the supplier to liquidate their performance bond and the supplier accepted the delays and in return all penalties were imposed on the supplier. It is to be noted that according to PSOs own tender if a supplier is over six days late in delivering the cargo they can cancel the cargo and encash their performance bond, however, M/S FAL Oil is five months late the performance bond of M/S FAL oil has not been encashed worth $7.8 million they said adding that the amount of the performance bond held by PSO is expiring on March 31st, 2011. It is not out of place to mention that M/S FAL Oils representatives have visited Pakistan to negotiate with PSO, as the performance bond was only valid till 31st March 2011. Interestingly the cash strapped PSO on the one hand claimed that they had no money due to the circular debt and had also stopped the supply of fuel oil earlier to the various power plants and hold back payments to refineries but on the other hand we saw PSO completely flaunting its import tender rules and favouring the influential one business tycoon who had reportedly deep relations in the government.