Pakistan State Oil (PSO) is set to ask the federal government for a Rs. 70 billion bailout so it may avoid default.
Chairman Board of Management at PSO Asif Baig Mohamed will write to the government in the wake of mounting liquidity challenges faced by the petroleum corporation. This was decided during a meeting of the PSO Board of Management on the oil supplier’s dire financial state, reported Business Recorder.
It was revealed at the meeting that PSO’s liquidity position has reached a critical juncture, with receivables soaring to Rs. 852 billion. Sui Northern Gas Pipelines Limited owes Rs. 571 billion.
With total borrowing projected to reach Rs. 511 billion, PSO faces imminent default on international payments, prompting drastic measures such as delaying deposits to the government and deferred payments to suppliers.
Muhammad Taha, Managing Director and CEO of PSO, urged at the meeting the need for government intervention to avert default. He underscored the role of the power sector in alleviating PSO’s financial strain, urging prompt payment of outstanding dues to facilitate PSO’s operations.
The board unanimously agreed to author a letter to the government for financial support and outlining specific measures to address the company’s liquidity crisis. The letter will implore the government to release Rs. 70 billion through SNGPL, enforce strict directives to prevent further deficits and explore mechanisms for the recovery of outstanding receivables.
