As Pakistan State Oil’s (PSO) receivables keep on increasing, the state oil owned conglomerate has requested the government to immediately release Rs105b for ensuring it makes payments to oil suppliers and in improving its working capital position. PSO has been struggling through a payment crisis due to a lack of funds and growing receivables which have touched Rs295b.
As per a senior government official, power generation companies were the major defaulters of PSO, who owe Rs257b to the state-owned oil company. The payment crisis has created a volatile situation for PSO, as it may default on payment to its creditors too. PSO is owed Rs 257b by power companies, Rs9.6b by the government on price differential claims, Rs 15b by Pakistan International Airlines (PIA) and Rs 11.9b by Sui Northern Gas Pipelines (SNGPL) for LNG supplies.
The government has shown willingness to only release a paltry sum of Rs5b for PSO, which will not meet its requirements considering the dire circumstances it is in. The official also said “At present PSO is running its business by borrowing from banks and bill receipts through white oil sales, however it has utilized all credit lines available with banks.”
PSO had reached on an accord with power producers under which for all the fuel supply, current outstanding dues would get cleared but even then the outstanding amount for that has reached a figure of Rs55b.