ISLAMABAD

The government has failed to resolve lingering issue of price differential (dues) of billion of rupees between the Pakistan State Oil (PSO) and Water and Power Development Authority (Wapda), as the cash-starved PSO is struggling to maintain the required oil inventory.

The total price differential debt owed by Wapda to PSO is Rs 3 billion which is outstanding for the last 12 years, the official sources in the Ministry of Petroleum and Natural Resources revealed The Nation here on Tuesday.

The official said that the issue started 2003, during president Musharraf regime, when the government directed the PSO to sell furnace oil cheaper to Wapda and the government will take care for the price difference, which is now in billions.

The then government had asked PSO that instead of charging the normal price for the High Sulphar Furnace Oil (HSFO) from Wapda, charge them the price of Low Sulphar Furnace Oil (LSFO). The step was taken to provide relief to the electricity consumers and to protect them from hike in their utility bills, the official maintained adding that the price of Low Sulphar Furnace Oil is cheaper than High Sulphar Furnace Oil and this way the government tried to reduce the losses incurred by Wapda.

Now the issue is revolving among PSO, Wapda and the ministry of finance for more than a decade. As an oil marketing company PSO is independent to set the selling price of its commodities but the then government interfered in the pricing market on behalf of Wapda, the official informed. When asked who will be paying the debt now? The official said that although Wapda has approached the government for pursing PSO for the cheaper price of the commodity but the government was guarantors and it must play its role for resolving the issue.

It is due to financial constraints that the OMC failed to maintain the required oil inventory of 20 days as per Pakistan's petroleum rules.

Besides the price differential debt the other receivables of PSO have crossed Rs200 billion and if the government wants to attain the 20 days oil inventory target and ensure the uninterrupted oil supply it should immediately move to streamline the highly complicated and flawed payment system.