Govt fuels up PIA with letter to PSO instead of Rs 2b | Pakistan Today

Govt fuels up PIA with letter to PSO instead of Rs 2b

*Fuel supply to PIA continues after a letter by Ministry of Aviation to PSO directing oil giant to show ‘flexibility’ in its fuel-suspension warning to PIA, following a default by the national flag-carrier amounting to Rs 12b

The federal government has intervened to bail out the cash-strapped Pakistan International Airlines (PIA) following the national flag carrier’s failure to meet Tuesday’s deadline given by Pakistan State Oil (PSO) for partial payment of its Rs 12.1 billion outstanding dues.

On Monday, PIA had pledged to pay at least Rs 2 billion to PSO by 5pm on Tuesday to avoid suspension of jet fuel supplies by the latter to its 35-aircraft fleet. While the deadline has passed, PSO officials have denied having received any money from the defaulting PIA.

“They (PIA) have not made any payment to us,” an official at the state-run oil giant told Pakistan Today.


Rather, he said, PSO had received two separate letters – one from PIA and one from the federal government asking for “flexibility” in its fuel suspension warning.

“In its letter, PIA requested us to extend our deadline (Tuesday) for the payment (of Rs 2 billion),” he said.

The PIA management cited financial constraints for its inability to clear its dues that are outstanding for the last couple of years and requested to be “accommodated”, said the PSO official.

Following the letter from PIA, PSO received a letter from the Ministry of Aviation.

“We also received a letter from the (federal) government asking us not to suspend fuel supply to PIA,” said the official.

According to the official, the ministry’s letter stated that grounding of fuel-scarce PIA planes would “be a national shame for all of us”.

Asked for how long PSO authorities had extended Tuesday’s deadline for the funds-starved PIA, the official said it was “yet to be decided”.

Being a public sector entity PSO is bound to honour the government’s request, he said.

“But this default (of PIA) would reflect adversely on PSO’s ability to retire its debts from fuel suppliers,” the official said.

On the other side, PIA spokesman Rafique Zardari expressed complete ignorance of how the “higher” management was dealing with the issue.

When informed about PSO’s claim of having received a letter from the ministry instead of cash from PIA, Zardari said, “The higher management might have talked to the federal government. I am not sure about it.”


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