Share this story!            

Shell warns to stop operations if claims not paid

ISLAMABAD: Shell Pakistan has warned the new government to close its operations in Pakistan if differential claims were not paid to it, well-placed sources told Daily Times on Wednesday. Sources in Petroleum Ministry said that MD Shell, Ismail Zavergi, has held meeting with the Prime Minister Yousaf Raza Gillani and raised the issue of non-payment of differential claims. MD Shell has said the company has to receive Rs 9.3 billion differential claims from government and if this amount were not paid then it would close its operations in Pakistan. He also raised the issue of revision of oil pricing formula in which government was going to reduce the margin of the Oil Marketing Companies (OMCs). He said that government was not paying differential claims on one side and was working to change oil-pricing formula on the other side to reduce the margin of the companies. Sources said that state run Pakistan State Oil (PSO) was in the most difficult situation to continue its operations in the country as government has paid Rs 6.5 billion to small oil marketing companies (OMCs) but PSO and Shell were in the most critical situation to continue operations due to non payment of subsidies. They said that PSO had stopped the fuel supply to HUBCO due to non-payment of Rs 2 billion. They said that PSO would resume supply of oil to HUBCO after obtaining letter of comfort from water and power ministry. They said that PSO’s main defaulters are Pakistan International Airlines (PIA) and Pakistan Electric Power Company (PEPCO) that are causing hurdles to continue its operations. With the increase in the prices of oil in the international market, the volume of subsidy starts rising despite passing on some impact of hike in the oil prices to the consumers. staff report

Home | Business

Share this story!