Pakistan State Oil’s (PSO) liquidity crunch has hit an all-time high of nearly Rs. 900 billion due to a menacing rise in receivables to Rs. 621.168 billion and payables to Rs. 268.5 billion.
According to a national daily, the crisis has put Pakistan’s winter LNG supply at risk, as PSO’s receivables and payables have risen to Rs. 890 billion. The state-run fuel importer is struggling to offload its liabilities for letters of credit (LCs) amounting to Rs. 218.5 billion for the procurement of furnace oil and LNG.
According to the company’s current financial position, the non-payment of Rs. 400.258 billion by Sui Northern Gas Pipeline Limited (SNGPL) in the category of LNG imports has emerged as a detrimental issue. SNGPL has already failed to pay Rs. 393.5 billion to PSO and owes Rs. 6.758 billion in exchange rate losses to the state-owned company.
PSO’s liquidity situation and SNGPL’s nonpayment of dues have cumulatively put the country’s LNG supply at risk. The company’s borrowing limit has already been reached and if the situation persists, it will be unable to borrow funds to maintain the LNG supply in the future.
Other data suggests the power sector still owes Rs. 176 billion to PSO. Power companies and the Central Power Purchase Agency (CPPA) owe Rs. 146.877 billion, HUBCO Rs. 24.737 billion, and KAPCO Rs. 5.932 billion, while the Pakistan International Airlines owes Rs. 23.750 billion to the government-owned entity.
On the flip, PSO owes Rs. 8.934 billion in price differential claims to the state treasury. The company is also required to pay Rs. 10.680 billion as part of the exchange rate differential on the FE 25 loan.
PSO is also required to pay Rs. 26.641 billion to Pak-Arab Refinery (PARCO), Rs. 9.783 billion to Pakistan Refinery Limited (PRL), Rs. 4.401 billion to National Refinery Limited (NRL), Rs. 8.309 billion to Attock Refinery Limited (ARL), and Rs. 0.86 billion to ENAR Petrotech Services Private Limited.
Overall, PSO’s liabilities for LC payments to Kuwait Petroleum Company (KPC) and LNG payments to Qatar have increased to Rs. 218.5 billion, bringing the total payables to Rs. 268.5 billion.
