Non-payment of dues: PSO warns of disruption in flight operations

ISLAMABAD: Pakistan State Oil has rung the alarm bell in a meeting of the sub-committee of the Public Accounts Committee by saying that non-payment of its dues could disrupt the flight operations.

PSO officials told the sub-committee that the Finance Ministry should release Rs20 billion to avoid the collapse of PSO. The meeting was held on Tuesday, chaired by its Convener Sardar Ayaz Sadiq in which the audit paras of the Petroleum Division for the years from 1999 to 2009 were examined.

The deputy managing director of the PSO told the sub-committee that the total dues of the PSO are over Rs 360 billion while the PSO needs Rs 103 billion and Rs 105 billion for April for the Letter of Credit for which there was neither an alternative plan nor any financial plan. He told the committee that the PSO provided 96 per cent of the jet fuel to aviation companies and funds were not released to the PSO. It is for this reason that the system of flights could collapse. The petroleum secretary seconded the views of the PSO’s DMD but said the bailout package for the PSO will be approved by the federal cabinet and the ECC of the cabinet. The PSO deputy managing director requested the Finance Ministry to release Rs 20 billion funds to save the company.

The representative of the Finance Ministry told the committee that the tender for the Islamic Sukuk bonds of Rs 200 billion for the payment of PSO's Rs 360 billion circular debt was to be opened in Karachi but was stopped at last minute due to objection of the Mutual Funds Association but this will be settled in a day or two. The PSO official told the committee that out of Rs 360 billion circular debt, a major chunk of Rs 197 billion is due from RLNG, while the company did not get the financial cost of credit financing facility of Rs 100 billion from banks.

While examining another audit para, the sub-committee of the PAC directed the government-owned company OGDCL to regularize their 20-year old audit objections in a month from their board of directors, otherwise, action will be taken against the chief financial officer and the MD of the company.

When a case of oil theft in 2005 in Multan came up and it was found that the FIA had taken no action over it, PAC member Khawaja Asif charged that only politicians were facing inquiries on fake complaints. “Nawaz Sharif was punished for only 10,000 Dharam salary by the Supreme Court of Pakistan. He said while the FIA is sleeping on cases of millions of rupees only politicians are being made scapegoats,” he said and added that the system leaves everyone except politicians and the PAC has become a joke as it does not have teeth. People who made millions are getting protection either from the NAB or other entities, Asif said.