PSO Stops PIA’s Fuel Supply Over Non-Payment of Dues

Pakistan State Oil (PSO) has once again stopped the supply of JP1 aircraft fuel to Pakistan International Airline (PIA).

A source told ProPakistani that due to non-payment of daily purchases, PSO has temporarily halted the JP1 supply until payments are made. The source further added that PIA had not paid their dues for an entire week; a clear violation of agreement between both organizations.

The official said:

PIA purchased close to 530 tons of JP1 from PSO and for that, the airline owes Rs. 340 million to the oil company for daily purchase of the fuel.
Due to non-payment for an entire week, PIA currently owes a total of Rs. 2.38 billion.

PIA spokesperson confirmed the PSO’s supply constraints and that because of these constraints, a couple of flights – PK 306 and PK 370 – were delayed. The spokesperson added that following high level discussions, PSO has resumed the fuel supply.

PSO has been ensured full payment of the outstanding dues by Thursday evening.

PSO took this decision to facilitate the passengers of PIA, and resume the fuel supply. As per the agreement, PIA management has promised to pay the current dues by Thursday evening.

PIA is the biggest buyer of JP1 fuel from PSO and this isn’t the first time that PIA has been forced into the corner to pay the money as it is a reoccurring problem. The total outstanding payments of PIA have reached up to Rs. 15.80 billion.

  • This is a recurring problem. I was on the Board of PSO a few years ago and I asked as to why does PSO get indebted to such high receivables from PIA, when Shell the other supplier is paid in cash by PIA. The answer was very simple. The Ministry pushes them and forces them to keep on giving and then get deeper into debt.

    I have not been able to understand this logic that the Government keeps on perpetuating its own circular debt and then blames the organisations for inefficiency and mismanagement!

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