MULTAN,June 3rd:The Pakistan State Oil (PSO) is facing a distinct possibility of default which might disable it from paying its dues to the oil refineries, and for imports, and has warned the Pakistan International Airlines (PIA) that it would suspend fuel supply from July 1, in case of continued default, it has learnt.According to sources, PSO management in a letter sent to PIA Managing Director (MD) Captain Muhammad Aijaz Haroon stated that due to cash flow problems, PSO's position has gone from bad to worse. "We are facing tremendous pressure of default of payments to refineries and in imports of various products such as petrol, high speed diesel (HSD), furnace oil and jet fuel for the entire country which is most essential to keep the wheels moving," the letter said.PSO management has drawn attention of PIA MD towards various correspondence in which it had committed to clear the dues by June 30, 2010. "Since PSO and PIA have worked together hand in hand for decades and therefore I request you to clear all dues by June 30, 2010 so that PSO can maintain uninterrupted fuel supplies," PSO management said adding that "we have been accommodating the national career as much as possible but now in current scenario we are not in a position to accept your further request."Please note that PSO will have no other option but to suspend the supplies from July 1, 2010 in case the outstanding amount along with financial charges is not cleared," PSO management said.While referring to letter dated March 1, 2010 addressed to Director Finance PIAC, PSO lamented that the schedule of payment by PIA has regretfully not been followed. "It is also important to note that in the said payment schedule we also advised that the actual outstanding payment was Rs 1.822 billion with a later payment surcharge of Rs 884 million as against Rs 1.660 billion mentioned by you in your letter dated February 19, 2010,"PSO adds.As on June 2, PSO receivables from different clients including power sector were Rs 127.8 billion which include: Wapda Rs 41.14 billion, Hubco Rs 48.09 billion, Kapco Rs 25.11 billion, OGDC Rs 396 million, KESC Rs 1.72 billion, Power Holding co Rs 1.3 billion, price differential claims (PDC) on imported HSD Rs 1.382 billion, PDC on imported PMG Rs 2.93 billion, PDC under gas load management plan (KESC) winter 2010 Rs 2.409 billion and PDC under gas load management plan (KESC) summer 2010, Rs 1.167 billion.PSO payables to local refineries as well as international fuel suppliers are Rs 120.18 billion which include; Rs 31.45 billion to Parco, Rs 12.35 billion to PRL, Rs 9.34 billion to NRL, Rs 18.24 billion to ARL and Rs 4.84 billion to Bosicor.PSO is to make payment of Rs 43.47 billion on account of L/C to KPC and fuel suppliers.