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Ministry threatens to stop oil supply to power sector

The Petroleum and Natural Resources Ministry has threatened to stop furnace oil supply to the power sector due to non-payment of massive dues running into hundreds of billions of rupees.

The ministry has sent a letter to the finance, and water and power ministries asking them to arrange for immediate payments of dues of Pakistan State Oil (PSO) as the state-owned oil marketing company has to pay Rs93 billion to international oil suppliers. PSO now faces a very real threat of defaulting on its obligations.

The power sector is piling up a debt of Rs800 million per day towards PSO whereas it is only paying up Rs200 million daily, leaving a daily yawning payment deficit of Rs 600 million. The petroleum ministry sent a letter to the Finance Ministry seeking immediate payment of Rs40 billion to avert PSO’s default on letter of credit.

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