PSO hard pressed to collect over Rs300 bn from defaulters

ISLAMABAD: Pakistan State Oil (PSO) continues to face incessant surge in financial miseries as its receiveables have further swelled to over Rs300 billion – a barrier that was never earlier crossed in its history. This has put the state-owned entity into red zone as the increasing receivables have caused more hike in financial woes.

PSO spokesman confirmed the development saying that the receiveables of the oil marketing company, which stood on June30, 2016 at Rs234 billion, have now gone up to Rs300.8 showing an increase of Rs66.8 billion.

The state-owned entity, he said, is the victim of the circular debt that has now increased to over Rs479 billion because of inefficient power sector. Now the red lines are crossed as the bleeding power sector currently owes a huge amount of over Rs257 billion as of May 29, 2017 showing that liquidity crisis of PSO has aggravated more.

So much so, Pakistan International Airlines (PIA) has also emerged as the defaulter of PSO as the national flag carrier is needed to pay Rs15.6 billion. SNGPL has also joined the defaulters list as the said gas utility is also required to clear the arrears of Rs18.2 billion in the head of LNG supply by PSO.

Owing to the increasing liquidity crisis, cash strapped PSO has so far borrowed Rs142 billion from commercial banks to keep its strategic operations – import of fuel and LNG for power generation, sources in Ministry of Petroleum and Natural Resources told The News. They said that PSO has earlier demanded Rs105 billion from the federal government for builidng up the fuel stock by June30, 2017 to ensure the smooth supply of fuel to power houses for electricity generation. So far there is nor progress on the demnad as according to finance ministry sources say that the government will soon release Rs 50 billion to PEPCO (Pakistan Electric Power Company) and it will be PEPCO that will decide the amount to be given to PSO.

According to receiveables and payables position as of May 29, 2017 of which the copy is also available with The News, in the power sector, public sector electricity generation companies (Gencos) owes tp pay Rs151 billion to PSO. Hubco is also the defaulter of PSO which is needed to pay huge amount of Rs65.4 billion. Likewise, Kot Addu Power Company (Kapco) has also followed Hubco as it is needed to pay Rs33 billion to the entity.

The most irritating fact is that it is none other than national exchequer where in tax payers money is parked has so far sustained the loss of Rs63.3 billion in the shape of late payment surcharges just on account of inefficient power sector, PIA and Sui Northern.

Coming to the payables of PSO, the document unfolds that the state-owned OMC owes Rs60.6 billion that include Rs49 billion which PSO is badly required to pay for opening of letter of credits for the import of fuel and LNG for power generation apart from payments to Kuwait Petroleum Company. In addition, PSO also owes Rs 11.6 billion to six national refineries that include Pak-Arab Refinery Company (Parco), Pakistan Refinery Limited (PRL), National Refinery Limited (NRL), Attock Refinery Limited (ARL), Byco and Enar.