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Financially troubled PSO stops payments of local refineries

By Tanveer Malik
March 15, 2023

KARACHI: State-owned oil marketing company, Pakistan State Oil (PSO) has stopped making payments to the local refineries after it ran into financial troubles, The News learnt on Tuesday.

The state-owned oil marketing company (OMC) has to pay the amount to local refineries for purchasing petroleum, oil, and lubricants.

Sources in the oil sector said that the Pakistan State Oil, being an oil giant having over fifty percent share in sales of petroleum products in the country, has run into financial trouble after its receivables crossed over Rs750 billion in the recent days.

According to the sources, the huge receivables of PSO have pushed it into deep financial troubles, so much so that it has been left with no option but to stop the payments of local refineries.

According to the data of PSO payment to refineries, the OMC has to pay Rs25 billion to Pak-Arab Refinery Company (PARCO), Rs10 billion to Pakistan Refinery Limited (PRL), Rs3.469 billion to National Refinery Limited (NRL), Rs9.049 billion to Attock Refinery Limited (ARL), and Rs4.108 billion to Cnergyico.

The News reported a few ago ago that PSO’s inter-corporate debt has increased to Rs1,024 billion with receivables at Rs762.653 billion and payables at Rs261.155 billion.

PSO Managing Director Syed Taha did not confirm the stoppage of payments to refineries when he was contacted for the company's version. However, he only commented that the PSO has been suffering from financial troubles.

As per the data, Sui Northern Gas Pipelines Limited (SNGPL) has so far emerged as the biggest defaulter of PSO.

The SNGPL owes the state-owned OMC Rs492.102 billion as of March 8, 2023.

The power sector continues to haunt the state-owned oil marketing company as it is required to pay Rs178 billion.

It is followed by the Pakistan International Airlines (PIA) and the government of Pakistan, which owe PSO Rs92.5 billion.

The most crucial payment of Rs124.666 billion in the head of LPS (late payment surcharge) is also part of the total receivables that have soared to Rs762.653 billion.