PSO had already slowed down the supply of oil to these companies and has warned that it completely shut down supply if payment was not made immediately.

In a letter to Hub Power Company (HUBCO) and Kot Addu Thermal Power Company (KAPCO), PSO has threatened the suspension of oil supply in case both failed to pay at least Rs 20 billion out of the total dues of Rs 57 billion. The letter says PSO will not be held responsible for the consequences arising from the discontinuation of supplies.

These receivables have now crossed Rs.103 billion and power sector companies owe over Rs.93, including Rs38.7 billion from Pakistan Electric Power Company, Rs35.5 billion from Hubco and Rs18.7 billion from Kapco.

Finance ministry officials are of the opinion that this debt is still manageable as PSO’s payables have also increased up to about Rs68.5 billion on February 23. Reportedly these include Rs35.3 billion due to Parco, Rs14 billion to Pakistan Refinery Limited, Rs15 billion to Attock Oil, Rs8.7 billion to National Refinery and Rs5 billion to Bosicor Refinery.

Finance ministry officials Wednesday said, “cash flows of power companies will improve as a result of tariff increase. However, receivables of some companies had increased significantly and outgoing finance minister Shaukat Tarin would preside over a meeting on Saturday to ensure some payments to PSO.”

Earlier this month Finance Minister Shaukat Tarin had said that the appointment of the , federal price adjuster, “will ensure the payment of dues to Pepco from the government departments.”

Rana Asad Ameen has been appointed as price adjuster.

“The government will not let PSO default at any cost and the Finance Ministry is working to release some amount to bail out the firm,” the departing Finance Minister had said.

Analysts argue discontinuance of Oil and fuel supplies to the power plants will not only increase the duration of load shedding but also burden the customers with further increase in power rates.