Friday, January 01, 2010
By our correspondent
KARACHI: The intra-corporate circular debt has again surged as receivables of Pakistan State Oil (PSO) from the power producers increased to Rs79 billion as of Thursday, company officials told The News.
The fuel oil supplier has Rs31.7bn stuck with PEPCO, Rs17.54 with KAPCO and Rs31.83bn with Hub Power Company, they said.
“Last payment of just a few hundred million rupees against fuel purchases was made earlier in December,” one official said. “PSO has been supplying oil on daily basis and now cash flow problems have started to cripple everyday operation.”
PSO supplies 500,000 tons of fuel oil to public and private sector power plants every month on average. The recurring creation of debt creates problem for PSO to pay off dues of refineries and international suppliers.
The vicious cycle of intra-corporate circular debt has affected performance of industries in the energy supply chain from gas suppliers to power producers. Government has already issued term finance certificates of Rs165 billion.
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