Islamabad   -   Pakistan State Oil has demanded advance payment for the supply of Furnace Oil(aHSFO and LSFO) during the four winter months (October 2020 to January 2021) stating that its Rs 197 billion are already outstanding from the power sector among the total outstanding receivables of Rs 313 billion. The total requirement of HSFO and LSFO is around 1.1 million Metric Tons for power generation for the four months to overcome the gas shortage in the winter season, official sources told The Nation here Wednesday. Government is planning to divert gas from the power plants will be diverted to other sector and instead Furnace Oil will be used for power generation. The source said that the National Power Control Centrer (NPCC) has informed that there is low inventory of Furnace Oil (HSFO and LSFO) with Gencos and IPPS while the gas and RLNG supply might be also reduced due to increase demand in the upcoming winter season.  From October 2020 to January 2021 a total of 736,078 MTs HSFO and 362,080 MTs of LSFO would be required to maintained adequate supply of power.  The local refineries would not be in a position to meet the demand, therefore, the required furnace oil will be imported. Pakistan State Oil has informed the government that Rs 197 billion are already outstanding from the power sector among the total outstanding receivables of Rs 313 billion and ,therefore, a substantial amount is required for arranging imported supplies, the source said.

P50 has further said that the operational and logistic capacity and will make all efforts to arrange fuel oil to meet the generation requirement of fuel as it has successfully done in the past. However, this would be subject to continuation of the firm volume and financial assurances in the form of advance payment, as already around Rs 197 billion are outstanding from the power sector among the total outstanding of Rs 313 billion. 

The PSO further said that it is requested that the local production for the refineries for this period should be established along with the firm orders from the IPPs.

This will enable us to determine the exact volume required to be imported alter the availability of fuel oil through local Refineries to avoid any surplus availability.

Furthermore there Is congestion of imports of industry vessels of Mogas and H50 alongwith export vessels of Condensate and Naphtha at FOTCO.

With the addition of HSFO/LSFO imports we need to plan the imports in advance so as to avoid demurrrages and shortages and also to ensure timely supplies to the power sector.

Meanwhile, the CPPA-G also informed the government that currently the cash flow position to pay for the oil supply is not adequate and additional finances would be required to maintain the Furnace Oil supply.

It is worth to mention here that the Cabinet Committee on Energy (CCOE) has last week directed the ministry of Energy to plan for meeting the industrial and residential gas demand fully during winter season, without resorting to load management.

Cabinet Committee on Energy reviewed implementation status HSFO and LSFO demand for power plants.

CCoE reviewed the requirement of the furnace oil for winter months presented by the Ministry of Energy. CCoE further directed the ministry to ensure that the utilization of all other fuel sources, including renewable and coal, is maximized before assessment of furnace oil requirement.

As per the CCoE directives an evaluation of domestic refining capacity would also be made so that minimum import of furnace oil is required.

Petroleum Division presented the natural gas demand supply situation for the winters including LNG import requirements.

CCoE directed the Ministry to ensure that no gas load curtailment is done for the industry and all efforts are made to meet the remaining system demand.