KARACHI – Pakistan State Oil (PSO) has denied the provision of furnace oil (FO) to Karachi Electric Supply Company (KESC) until price differential claims of Rs 3.9 billion are honoured by the utility corporation. A clear directive from the federal government is also needed to provide the facility to KESC, which is demanding FO on gas rate after reduction of gas supply from Sui Southern Gas Company, sources said.
However official sources in PSO on Friday have claimed that the oil marketing company has boosted the credit line of KESC to extend to at least 80,000 metric tonnes (MT) every day from the already enhanced supply of 50,000 MTs on normal rates. PSO had recently increased the credit line from 33,000 MTs to 50,000 MTs after the drastic reduction of gas supply to KESC.
Because of the closure of Bhit field of SSGC for the last few days, the gas supply to KESC has been reduced. “PSO shall not give subsidised furnace oil (at gas rate) to KESC as no directive from federal government has been issued,” they said. Furthermore, the PSO sources claimed, the oil company has requested the government to release the previous year price differential claims of over Rs 3.0 billion for providing subsidised fuel to KESC in 2009 and 2010.
The supply of subsidised oil to KESC would cost to at least Rs 155 million a day to PSO, and the company, facing a circular debt of Rs 172 billion, was not able give further oil at gas rate, they stressed. On the other hand, KESC, in the absence of the facility and with reduced gas supply, has announced nine-hour loadshedding in the city besides increasing the duration of power outages in industrial sector.
The company, which seeks the supply of FO at gas rate, as it enjoyed last year after an Energy Summit in Islamabad, is not only increasing the duration of power breakdowns across the city but also the schedule of loadshedding is also being changed frequently. It is pertinent to note that the government last year had given subsidised oil facility to KESC after a reduction of power supply from WAPDA.
To compensate the reduction of power supply from WAPDA, the government has ensured the supply of an additional 1,600 tonne per Day (TPD) of furnace oil, while paying the extra cost of fuel through its own account, in order to reduce power cuts in the metropolis. According to sources, though the supply of 650 MW from WAPDA continues, the same facility was being demanded by KESC to balance out the reduction of gas provided by SSGC this year.
