ISLAMABAD, Oct 26 (Reuters) - Pakistan International Airlines (PIA) has canceled 349 flights in the last two weeks due to a shortage of fuel supplies, it said on Thursday.

The flight cancellations since Oct 14 have affected both domestic and international routes, a PIA spokesperson told Reuters.

Flights are resuming on a daily basis, the statement from the company said, without giving further details. "The flights are being scheduled as per the availability of fuel," it said.

The PIA and the Pakistan State Oil company (PSO) have been locked in a dispute over payments. The airline says the PSO has suspended its credit line for the fuel, and is now releasing supplies only against a daily advance payment.

"The PIA is trying to manage funds," the statement said, adding that the resumption of the usual schedule will depend on the availability of funds. (Reporting by Asif Shahzad; Editing by Jason Neely and Jan Harvey)