KARACHI, March 8: The Pakistan State Oil on Tuesday finally received Rs20 billion from the power sector out of Rs30 billion committed in the Feb 21, meeting with the finance minister. The state-run oil marketing company got in its account Rs15 billion from Wapda and Rs5 billion from Kapco.

An official of the PSO said that the total receivables from the power sector and other companies were Rs169 billion and after receiving the amount from two companies the circular debt now stands at Rs149 billion.

He said the PSO still has to receive Rs37 billion from Wapda, Rs72 billion from Hubco, Rs25 billion from Kapco, Rs1.5 billion from PIA, Rs275 million from OGDC and Rs2 billion from KESC.PSO has to pay over Rs95 billion to the local refineries, which include Rs34.5 billion to Parco, Rs11.76 billion to PRL, Rs9.5 billion to NRL, Rs34.6 billion to ARL, Rs4.7 billion to Byco and Rs448 million to others.

LC payments to Kuwait Petroleum Company and fuel oil suppliers stand at Rs55 billion.

The official said that the PSO had asked for at least 50 per cent of its receivables from the power sector. At the Islamabad meeting last week the PSO was assured of getting Rs30 billion but so far it got only Rs20 billion which would be sufficient for few days. He said the circular debt issue should be resolved immediately and further accumulation of debt should be prevented.

Farhan Mehmood, an analyst at Topline Securities, said as Light Arab Crude price is over $110 per barrel, investors have started to worry about the circular debt and are concerned about the future dividend payouts.

He said Hubco and Kapco are continuously passing on the impact to their fuel suppliers. These two IPPs contribute more than 22 per cent of the total thermal electricity.

For IPPs, which rely on private fuel suppliers (Nishat Chunian and Nishat Power) their liquidity is continuously eroding. He said that circular debt issue may linger on for next one to two years.

He said the latest financials suggest that the net receivables (receivables less payable) of Hubco and Kapco remained the same during second quarter against first quarter 2010-11.

This shows growing circular debt is not affecting these entities as they are simply passing on the circular debt to the fuel suppliers.