The receivables of Pakistan State Oil (PSO), the state-owned petroleum company and the country’s biggest oil marketing company (OMC), have touched Rs. 398 billion, the highest ever in the company’s history.
According to details, the power sector owes the most money to PSO with Rs. 192.539 billion. Power generation companies (GENCOs) and the Central Power Purchasing Agency (CPPA) owe PSO Rs. 140.886 billion. HUBCO and KAPCO owe PSO Rs. 43.188 billion and Rs. 8.465 billion respectively.
Moreover, Sui Northern Gas Pipelines Limited (SNGPL) owes PSO Rs. 161.025 billion and Pakistan International Airlines (PIA) owes PSO Rs. 21.979 billion.
The inefficient power sector owes Rs. 74.372 billion to PSO under late payment surcharge (LPS) while the government owes Rs. 10.161 billion. The state-owned company has lost Rs. 6.585 billion due to the depreciation of Rupee against the US Dollar while it has lost Rs. 5.3 billion due exchange rate differential on FE 25 loan and late payment surcharge on the loan has increased to Rs. 7.730 billion.
As a result of non-recovery of Rs. 398 billion receivables, PSO finds itself in a difficult economic situation due to an abysmal cash flow situation.
PSO is unable to pay off Rs. 124 billion under an open letter of credits (OLCs) and standby letter of credits (SLCs) to Kuwait Petroleum Company (KPC) for the imported LNG.
It is also unable to pay Rs. 32 billion to 6 refineries. Pak Arab Refinery Company (PARCO) owes PSO Rs. 16.836 billion, Pakistan Refinery Limited (PRL) Rs. 4.931 billion, National Refinery Limited (NRL) Rs. 3.984 billion, Attock Refinery Limited (ARL) Rs. 3.848 billion, Byco Rs. 1.1 billion, and ENAR Rs. 1.403 billion.
Besides, PSO’s circular debt in the last three years has increased to Rs. 104 billion due to the provision of costly imported RNLG to domestic consumers. The circular debt is expected to touch Rs. 190 billion if it supplies the RNLG to domestic consumers in the ongoing winter season as well.
To ease some pressure, the government is mulling over providing relief of Rs. 50 billion to PSO and Pakistan LNG Limited (PLL) this winter. Otherwise, both state-owned corporations would go bankrupt due to the non-recovery of receivables and cash flow crisis.
The price of RLNG stands at $15.78 per MMBTU for November. In case it surges to $30-35 per MMBTU in the remaining months of the winter season, PLL would incur a loss of another Rs. 90 billion.
