Pakistan's Largest Private Utility At Risk Of Defaulting To State Oil Company

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Karachi - Pakistan's energy crisis is set to worsen as its largest private power company, HUBCO, faces defaults of billions of rupees amid rising oil prices and a financial crunch. The Hub Power Company or Hubco is facing a default of between 3.5 and 3.8 billion rupees (55 to 57 million dollars) to state-owned Pakistan State Oil (PSO), the country's largest private oil firm, sources on Karachi Stock Exchange said.

'We are working with the government of Pakistan to help resolve this situation,' a spokeswoman for Hubco, Lesley Ann Middlecoat, told Deutsche Press-Agentur dpa on Monday.

Middlecoat has denied confirming the amount of default. Pakistan has already been gripped by a severe power shortage which led to riots in several cities recently prompting the deployment of police and paramilitary forces. A sudden increase in high speed furnace oil to 42,000-43,000 rupees (650-660 dollars) per tonne has caused this crisis, analysts said.

Hubco has been facing a financial crunch due to sluggish payments from state-owned Water and Power Development Authority (WAPDA), the main buyer of the company's power production, resulting in defaults to the PSO, which supplies furnace oil.

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