Pakistan State Oil (PSO) is currently grappling with oil supply management issues as private entities and banks prefer to restrict their risk and international oil merchants demand cash and larger premiums, well-informed sources told ProPakistani.
In a letter to the federal government, the cash-strapped fuel provider stated that its total receivables were at Rs. 519.485 billion on April 14 and counting, as power companies, gas utilities, and other public sector enterprises, as well as the government, withheld huge sums on different counts.
PSO is having difficulty arranging fuel delivery under the current circumstances, since the demand for jet fuel and high-speed diesel (HSD) has surged in the global market, and money managers prefer cash payments and larger surcharges on delayed payments.
According to sources, the state-owned PSO has more than Rs. 265 billion in mandatory payables, including Rs. 223 billion to overseas long-term suppliers of natural gas, petroleum products, and matured letters of credit (LCs).
A total of Rs. 42.5 billion is owed to local petroleum providers, including Rs. 23.4 billion to Pak-Arab Refinery, Rs. 8.73 billion to Pakistan Refinery, Rs. 6.73 billion to Attock Refinery, Rs. 2 billion to National Refinery, and Rs. 1.6 billion to ENAR Petrotech.
Conversely, Sui Northern Pipelines Limited owes the most money (Rs. 272 billion), while Sui Southern Gas Company Limited owes Rs. 6.8 billion. As a result, the total amount owed to PSO by the two gas utilities for liquefied natural gas was Rs. 279 billion.
The total outstanding against power companies was Rs. 167.4 billion, with Rs. 141 billion against state-owned entities, Rs. 21 billion against Hubco, and Rs. 5.2 billion against Kapco. Another Rs. 73 billion is owed to the government on various accounts, including Rs. 23 billion to PIA, Rs. 40 billion in claims against the government, and Rs. 10.5 billion in exchange rate adjustments.
Market sources suggest that PSO needs at least Rs. 100 billion to keep the fuel market afloat. The government would have to pay at least Rs. 35 billion within days to compensate for the price disparity it has already incurred on its own for the period April 1 to 15.
Experts forecast petrol supplies in Punjab would last fewer than nine days, with ten days in Khyber Pakhtunkhwa and Balochistan, 46 days in Sindh, and seven days in Gilgit.
In recent weeks, the premium for HSD supply has varied between $8 and $13 per ton, up from less than $2.5 a few months earlier.
Moreover, the total furnace oil inventories for power generation are no more than 125,000 tons, or less than 10 days, due to peak fuel demand for power generation in the unavailability of significant LNG supply and water storage in dams.
