It was recently reported that Pakistan State Oil (PSO) has warned the national carrier, PIA, to pay its outstanding dues to ensure the continuous supply of jet fuel.
Many reports indicate that PSO had asked PIA to pay PKR 830 million but it paid only PKR 430 million. PSO has now written a letter to authorities of the national carrier to clear all outstanding dues in order to receive continuous supple of jet fuel. The petroleum company pointed that the airline has not paid the full amount yet despite repeated requests and assurance from them, which is clearly a breach of agreement. The company also informed PM, Finance Ministry and Ministry of Petroleum about the overdue payment issues.
‘PIA is called upon to pay the outstanding amount, failing which PSO would be constrained to immediately suspend oil supplies,’ PSO said in statement.
The cash starved petroleum company is currently experiencing an acute financial crisis because of mounting receivables from different companies. Also, earlier this month, Competition Commission of Pakistan (CCP) imposed a hefty fine of PKR 150 million on the company because it was running a misleading marketing campaign about its products, “Premier XL” petrol and “Green Plus”.
As yet, PIA has not responded to the company’s request to clear arrears. Also, considering the recent incidents that occurred, such as fatal crash of PIA‘s ATR aircraft, the airline could not afford to witness freeze in oil supply since investors are already not satisfied with the airline’s performance. In any case, it is yet to see how much longer PIA will take to clear its dues.