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PSO’s circular debt hits Rs658bn

March 29, 2022

ISLAMABAD: The cash flow of the state-owned oil marketing company Pakistan State Oil (PSO) has further aggravated as its circular debt has risen to Rs658 billion with receivables at more than half a trillion rupees and payables at Rs157 billion.

“We have to import 23 fuel cargoes to cater to energy needs of the country next month ie April, but we need additional cash of Rs60 billion immediately from the federal government. If the said amount is not made available, then PSO will not be able to open new LCs,” a spokesman of the PSO said.

He further went on to say that the company earlier planned to import 17 fuel cargoes for April, which included seven LNG cargoes, three furnace oil, at least six diesel and five motor gasoline cargoes. But with Gunvor backing out from providing four LNG cargoes and failure of PLL to procure LNG from the spot market for April, the government wants to import more furnace oil to be used for electricity generation.

“So we have asked the federal government to release additional cash of Rs60 billion to avert the impending fuel shortage in the next month of April,” the official said, adding that PSO was currently faced with a huge liquidity crisis mainly because of non-payments from Sui Northern Gas Pipeline Limited (SNGPL) and the power sector.

According to the latest receivables and payables position of PSO as of March 27, 2022 available with The News, the receivables of the state-owned entity have jacked up to Rs500.908 billion and payables to Rs156.901 billion.

The receivables and payables data shows that LNG sector has become the biggest headache for PSO as SNGPL has emerged as top defaulter in the head of the import of LNG as it owes PSO Rs278.844 billion. The second biggest defaulter is the power sector which owes the state entity Rs167.737 billion.

Among the power sector entities, power generation companies (GENCOs) are required to pay Rs140.866 billion, Hubco Rs21.705 billion and Kapco Rs5.167 billion.

The national flag carrier---PIA is the third biggest defaulter that owes PSO Rs22.483 billion. In addition, PSO is also required to be paid price differential claims (PDC) amounting to Rs8.934 billion from the government due during the period 1996-2014 and Rs12.311 billion again in the head of price differential claims from the government for the financial year 2022 and Rs10.6 billion in the head of exchange rate differential on FE25 loan.

Meanwhile the payables of PSO in the heads of the LCs for fuel imports from Kuwait Petroleum Company (KPC) and standby letter of credits (SBLC) for import of LNG payments have soared to Rs123.260 billion.

PSO’s payables towards refineries have also hiked to Rs33.641 billion, which include the amount of Rs18.249 billion to PARCO, Rs7.021 billion to Pakistan Refinery Limited (PRL), Rs2.082 billion to National Refinery Limited (NRL), Rs5.146 billion to Attock Refinery Limited, and Rs1.043 billion to ENAR Petrotech Services.

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