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PSO asks PIA to pay Rs1.5bn or face fuel supply cut

December 01, 2023

KARACHI: Pakistan State Oil (PSO) has sought Rs1.50 billion from Pakistan International Airlines (PIA) by Friday, on account of fuel supply payment, and warned to cut fuel supply if payment is not made, The News learnt on Thursday. T

he warning from PSO comes after the Federal Board of Revenue (FBR) ordered the freezing of PIA’s accounts in an effort to recover an outstanding tax amount of Rs2.76 billion a day earlier. However, on Thursday, FBR withdrew the orders to freeze the accounts of PIA. 

“FBR has ordered the unfreezing of the airline’s accounts across the country,” said a PIA spokesperson in an announcement, adding that the national carrier and FBR’s Large Tax Unit were in constant contact to resolve the issue. As PIA received some respite from FBR, the sword is hanging over fuel supply to PIA after PSO demanded the payment of Rs1.50 billion from the national airline by Friday. 

Pakistan International Airlines aircrafts can be seen at the Skardu airport in this image released on July 24, 2023. — X/@Official_PIA
Pakistan International Airlines aircrafts can be seen at the Skardu airport in this image released on July 24, 2023. — X/@Official_PIA

Sources said that PSO supported PIA despite being in financial troubles recently when PSO extended additional credit to the airline twice. However, PIA is violating its commitment. In this situation, PSO would be left with no option but to curtail the supply to the airline. Though the payment plan furnished by PIA on October 27, 2023, for the month of November 2023 did not cover the clearance of outstanding against current supplies, which had accumulated to Rs2,166 million till October 31, 2023, still, PSO continued supplies, sources said. As per the payment plan, an amount of Rs5,022 million was to be paid from November 1 to 27, 2023, whereas PIA paid Rs3,916 million, a shortfall of Rs1,106 million. PSO asked PIA to disburse Rs1,500 million by Friday for uninterrupted jet fuel supply, sources said.