Pakistan State Oil (PSO) is likely to stop fuel supply to several domestic and international airlines as its financial crunch has reached a new high.
As per details, PSO has several hundred billion rupees stuck in the energy market, which has forced the state-owned oil company to take this extreme step.
The chairman of the board of management of PSO has contacted the government in this regard.
In a letter to the finance secretary, the chairman of the PSO board has maintained that the oil marketing company has Rs. 335 billion in receivables from the energy chain, which might drive it into a financial crisis.
If the situation persists, the oil company might fail to continue fuel supply to various domestic and international airlines, he wrote.
The Economic Coordination Committee (ECC) discussed the issue in a recent meeting. The committee was informed about the losses worth Rs. 28 billion PSO occurred on net loans due to rupee devaluation against the US dollar.
The committee was also informed that the petroleum corporation is facing a cash crunch due to its impending Rs. 335.7 billion from Sui Northern Gas Pipelines Limited (SNGPL), Pakistan International Airlines (PIA) and the government of Pakistan.
ECC was told that this massive financial gap is seriously hurting PSO’s fuel supply to different sectors, so much that there is a risk of default on local and international payments. If this happens, the company might have to halt fuel supply to domestic and foreign airlines.