PSO receivables mount to Rs804.5bn by March closure

KARACHI: Pakistan State Oil (PSO), the state-controlled oil marketing firm, is wrestling with an alarming financial crunch as its receivables have ballooned to over Rs800 billion by March end, exacerbated by delayed payments from both public and private sectors, industry officials said on Monday.

"PSO has been striving hard to receive the payments from the different entities in the private and public sectors; however, its efforts are not yielding the desired results, which has been pushing it into financial troubles," a source in the oil sector told The News.

Te total PSO's receivables are Rs804.5 billion, and these huge receivables of PSO are because of the default of Sui Northern Pipelines Limited (SNGPL) on account of LNG imports, which comes to Rs525 billion.

PSO’s receivables from the power sector are also massive as it has to receive Rs189 billion from this sector. GENCOs/CPPA has to pay Rs153 billion to PSO, whereas HUBCO has to pay Rs31.2 billion to it. KAPCO has also owned Rs4.5 billion of PSO.

The government entities also defaulted on payment to PSO. Pakistan International Airline (PIA) has to pay Rs25.7 billion to the state-owned oil company, whereas the petroleum differential (PD) from the government stands at almost Rs9 billion. The major chunk of government-related receivables is Rs55.8 billion, which is the exchange rate difference on the FE25 loan.

On one hand, PSO’s receivables are settled at Rs804 billion; its payables stand at Rs244 billion by the end of March 2024. The oil company has to pay the amount to local refineries as well as foreign companies on account of buying petroleum products as well as LNG.

PSO has to pay Rs27 billion to Pak-Arab Refinery Limited (PARCO), Rs2.1 billion to National Refinery Limited, and Rs2 billion to Attock Refinery Limited. Whereas it has to pay Rs1.2 billion to ENAR and Rs649 million to Pakistan Refinery Limited.

PSO has to pay a huge sum of Rs210.5 billion on its other local and foreign payments, which includes the settlement of letters of credit (LCs) and payment to Kuwait Petroleum Company (KPC) as well as LNG payments.

The company has yet to announce the financial results for the** third quarter of this fiscal; however, in the first half of this fiscal, it posted Rs.7.7 billion profit after tax.

PSO bolstered its market share in white oil with a notable 1.9 percent increase, reaching 52.6 percent by the end of the period. This growth was primarily attributed to an increase in gasoline sales, where the company augmented its market share by 3 percent, reaching 46.1 percent in the first half of this fiscal.