The Pakistan State Oil (PSO) has informed the government authorities that it will be impossible for them to continue fuel supply to airlines if impending dues are not cleared. The state-owned oil supply company rang alarm bells during a sub-committee meeting of the Public Accounts Committee on Tuesday.
The PSO officials informed the participants that the company requires disbursement of at least Rs. 20 billion to avoid collapse. The closure of PSO would ultimately disrupt flight operations across the country.
PSO high ups had written a letter to the finance secretary late in January, mentioning that the oil marketing company had Rs. 335 billion in receivables from the energy chain, which might drive it into a financial crisis. If the situation persists, PSO might fail to continue fuel supply to various domestic and international airlines, it added.
However, the letter went unheeded, and as a result, PSO is now reached on the verge of collapsing, the officials said.
As per reports, the state-owned oil company has Rs. 335.7 billion in receivables from Sui Northern Gas Pipelines Limited (SNGPL), Pakistan International Airlines (PIA) and the government of Pakistan.
This massive financial gap is severely 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.