Islamabad: Pakistan State Oil’s (PSO) borrowing from banks has surged to Rs130.5b due to default of payments by Pakistan International Airlines (PIA) and power producers.
The main reason for the cash crunch is attributable to the circular debt that has impacted the energy supply chain. Considering the dire situation, the Ministry of Petroleum and Natural Resources has sought the help of the Civil Aviation Authority and Prime Minister’s office to save PSO from the brink of collapse.
In a letter written to CAA secretary by petroleum secretary, he requested that PIA’s outstanding liability of Rs15b owed to PSO on account of fuel supply be cleared, but no response was received, said an official. PSO had received a disbursement of Rs17b from the authorities a few weeks ago, after which no payments have been made till now.
In June, it had been reported that PSO’s receivables had crossed Rs300b. The payment crisis had created a volatile situation for PSO, as it could default on payment to its creditors as well. PSO was owed Rs 257b by power companies, Rs9.6b by the government on price differential claims, Rs 16b by Pakistan International Airlines (PIA) and Rs 18b by Sui Northern Gas Pipelines (SNGPL) for LNG supplies.
The official said that PSO was reaching the limit of exhausting its credit limit and the receivables were also rising, which was creating a crisis for the company.
